Taken from Growing Concerns -- A parenting question-and-answer column with Dr. Martha Erickson
Question: I've recently started doing child care in my home for several young children and I've observed some sexual curiosity that I'm not quite sure what to make of. Can you provide some guidelines about what is normal for young children and any problem signs that I ought to be aware of? Answer: Sexual curiosity is a natural phenomenon in children of all ages, but it does demand a careful response so that children develop a healthy respect for themselves and others. In general, this is what you might expect for children from infancy through the early school years.
Birth to 2 years
Babies explore their bodies with their hands, with no shame or sexual meaning attached to the behavior. In little boys, erections are a natural reflex, especially during diapering.
Young preschoolers are openly curious--asking, looking, touching. They figure out, "I'm a girl, you're a boy," and wonder about the similarities and differences. As they begin to discover the shock value with adults, they may use sex words and bathroom humor, often with little or no understanding of the meaning. It is not unusual for preschoolers to use masturbation for self-comfort when they are alone.
Elementary school years
As sexuality takes on new meaning, elementary aged children become more secretive about exploration (playing doctor with a friend, for example) and gradually become more modest about their bodies. They are curious about romantic and sexual fantasies, but often are vague or confused about details.
Although it is normal and healthy to express an interest in sexual things, there are red flags that caregivers should be aware of:
Preoccupation with sexual things (e.g., the child can't seem to stop talking about sexual things).
Acting out sexual behavior that involves force or violence.
These behaviors suggest the possibility...