Children tend to generalize novel labels to new, unlabeled objects (e.g., mutual exclusivity bias) when presented withone alternative category. Do children generalize in the same manner in a system of multiple alternative categories? Inthree experiments, a feature space was partitioned into three regions (i.e., two outer regions separated by an intermediateregion). Preschool-aged children learned labels for two competing categories that occupied the two outer regions of thefeature space. Children were then asked if any labels generalized to the unlabeled intermediate region. In Experiments1 and 2, the results showed that children generalized neither learned nor novel linguistic labels to the unlabeled region.In Experiment 3 objects were labeled with category information. Children generalized a single learned label but didnot generalize a novel label. These findings suggest that contrast between multiple alternative categories may decreasechildrens tendency to generalize novel labels to new, unlabeled objects.