Temporal resolution is often evaluated by measuring sensitivity to amplitude modulation (AM) as a function of modulation rate. Published data for AM detection on a noise carrier indicate that school-age children perform more poorly than adults, but thresholds increase with increasing AM rates above 50 Hz in a parallel fashion for both age groups. This result has been interpreted as reflecting adult-like temporal resolution in school-age children. However, this interpretation is complicated by the observation that inherent AM of the noise carrier can elevate AM detection thresholds in adults via modulation masking. Two studies with 5- to 11-year-olds and adults were carried out to better understand the development of AM detection with and without modulation masking. The first estimated thresholds for detecting 16-, 64- or 256-Hz sinusoidal AM on a 4.3-kHz carrier, a condition without modulation masking. Age effects were larger than previously observed with a noise carrier. The second study manipulated modulation masking by measuring detection of 16-Hz sinusoidal AM on a bandpass noise carrier (1.5—2.5 kHz), with and without additional masker AM at nominal rates of 6.3, 16, or 40.3 Hz. All listeners exhibited on-frequency modulation masking, with similar tuning to modulation rate for children and adults.