Recognizing the goals of others' actions is critical for much of human development and social life. Origins of this knowledge exist in the first year and are a function of both acting as an intentional agent and observing movement cues in actions. In this dissertation, I explore a new mechanism I believe plays an important role in infants' understanding of novel actions---comparison. In four studies, I examine how the opportunity to compare a familiar action with a novel, tool use action (through physical alignment of the two actions) helps 7- and 10-month-old infants extract and imitate the goal of a tool use action. In Studies 1 and 2, 7-month-old infants given the chance to compare their own reach for a toy with an experimenter's reach using a claw later imitated the goals of an experimenter's tool use actions. In contrast, infants who engaged with the claw, were familiarized with the claw's causal properties, learned the associations between claw and toys, or interacted in a socially contingent manner with the experimenter using the claw did not later imitate the experimenter's goals. Study 3 replicated the finding that engagement in physical alignment facilitated goal extraction and imitation and indicated that this was true for older infants (10-month-olds). It also demonstrated that observation of the same physical alignment did not lead to goal imitation at this age. Finally, Study 4 revealed that 10-month-old infants could learn about the goals of novel actions through the observation of physical alignment when a cue to focus on the goal of the two actions was presented during the alignment process (i.e., a verbal label), indicating that infants gained a conceptual representation of the goal and used structure mapping to extract the common goal between actions. Infants who heard a non-label vocalization during the observation of physical alignment did not later imitate the experimenter's goals. The nature, breadth, and implications of these findings are discussed. Together, these findings indicate that infants can extract the goal-relation of a novel action through comparison processes; comparison could thus have a broad impact on the development of action knowledge.