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This study tested a dynamic field theory (DFT) of spatial working memory and an associated spatial precision hypothesis (SPH). Between 3 and 6 years of age, there is a qualitative shift in how children use reference axes to remember locations: 3-year-olds’ spatial recall responses are biased toward reference axes after short memory delays, whereas 6-year-olds’ responses are biased away from reference axes. According to the DFT and the SPH, quantitative improvements over development in the precision of excitatory and inhibitory working memory processes lead to this qualitative shift. Simulations of the DFT in Experiment 1 predict that improvements in precision should cause the spatial range of targets attracted toward a reference axis to narrow gradually over development, with repulsion emerging and gradually increasing until responses to most targets show biases away from the axis. Results from Experiment 2 with 3- to 5-year-olds support these predictions. Simulations of the DFT in Experiment 3 quantitatively fit the empirical results and offer insights into the neural processes underlying this developmental change.