The present study examined whether children's variation in arithmetic performance was related to differences in their understanding of place-value. Training in place-value concepts was provided to a group of Chinese children who were poor in arithmetic. Their performance before and after the training was compared to that of the children in two control groups. The results showed that there were reliable connections between place-value understanding and addition and subtraction skills. Furthermore, training in place-value concepts was found to be effective in enhancing the children's place-value understanding and addition skills. Implications for instructions in arithmetic were discussed. Copyright 1997Academic Press