The present experiment examined the degree to which analytic and holistic modes of processing play a role in the way children and adults categorize upright and inverted faces. Seven‐year‐old children (n = 38), 10‐year‐old children (n = 40), and adults (n = 55) were instructed to classify upright and inverted faces into two categories. The construction of the categories allowed participants to categorize the faces either analytically (by focusing on a single attribute) or holistically (in terms of overall similarity). The results show both a developmental trend from analytic to holistic processing and an effect of face inversion with increasing age. Thus, it appears that 7‐year‐old children process upright and inverted faces in a way comparable to their processing of nonfacial visual stimuli, namely analytically, whereas a growing proportion of 10‐year‐olds and adults process only upright faces holistically by adopting a specific mode of face processing.