Mine (4.5) does too, a lot. Sometimes if I just say nothing, after a few seconds she'll correct herself and admit the real situation. She told me the other day that she turned her head around 360 degrees to look at something on her back. That is totally innocuous and I don't consider it a problem - i just said "oh really" without sounding too impressed. Often I make a joke about the issue, maybe insinuating a consequence: in this situation I might say something like well if you didn't do it, you'd better keep a look out for those watermelon rollers -- if they smash our watermelon there won't be any for us to eat. Then I'd ask for her help cleaning it up and then put the watermelon out of her reach and forget about it. I am convinced that at this age she believes what she says, or wants to so badly that she confuses reality with fantasy. In fact she has this phrase which she uses to identify lies: "the wrong truth." I think that's how she sees it - it's a truth, just the wrong one! I find in general that remaining detached more or less elicits the "right" truth from her - in everything, not just cases of lying. I mean the less I make a big deal of her "lies" the more she comes to me voluntarily with issues that trouble her, like things she did that she wishes she hadn't, or what she observed another child do that upset her, or something - in short, she trusts me to confide in me. I wouldn't worry too much about it unless it becomes an issue of safety or when it involves something serious. In those cases, I don't insist that she tell me the truth. I simply tell her that I know what really happened and that it's not okay because of xyz, etc. No reason forcing her to own up - she still gets the message. Just my experience, hope it helps.