While puppets have been used to test infants’ and young children’s understanding of agency, social cognition, and learning in developmental psychology labs, most research does not include a critical component of puppets for children: movement. In addition to various cognitive affordances, puppets can be used and interacted with in active, physicalized, embodied ways. A wide variety of fields, including theatre, education, and therapy have long used interactive and physicalized puppet play to help children learn, experience art, and express themselves. In developmental science, embodiment and physicalizing of knowledge, particularly through gesture, is known to enhance children’s learning. However, research on whether and how children engage with puppets using embodiment and gesture is missing. Without knowing the levels and types of gesture children use with puppets, theories of puppets cannot be inclusive of both passive and active methodologies. Here, we compare preschool aged children’s puppet play to their costumed role play and their physically passive watching of puppets or media. We ask if children show more gesture while using puppets, if so, what kinds, and whether that gesture affects their learning from vignettes. We find regardless of age or sex, children gesture significantly more while playing with puppets than when watching puppets or media. This level of gesture is similar to when they are role playing in costume. While more gesturing does not predict learning directly, types of gesture, which also differ in puppet play uniquely, do predict learning. These findings have implications for the use of puppets as passive theatrical shows meant to test children’s learning and understanding, and for the use of puppets in developmental research beyond infancy. Taking cues from the applications of puppets in other childhood contexts, children’s movements should be integrated as additional prospects for puppet-based developmental methods. •Children’s natural out-of-lab engagement with puppets is embodied.•Children gesture more with puppets than when watching narratives.•Children’s puppet play gestures are closer to role play.•Some puppet gesture is associated with learning.