Although many animal species show at least some evidence of cultural transmission, broadly defined, only humans show clear evidence of cumulative culture. In the current study, we investigated whether young children show the "ratchet effect," an important component of cumulative culture--the ability to accumulate efficient modifications across generations. We tested 16 diffusion chains--altogether consisting of 80 children--to see how they solved an instrumental task (i.e., carrying something from one location to another). We found that when the chain was seeded with an inefficient way of solving the task, 4-year-olds were able to innovate and transmit these innovations so as to reach a more efficient solution. However, when it started out with relatively efficient solutions already (i.e., the ones that children in a control condition discovered for themselves), there were no further techniques invented and/or transmitted beyond that. Thus, young children showed the ratchet effect to a limited extent, accumulating efficient modifications but not going beyond the inventive level of the individual.