Many cognitive scientists agree that musical play is beneficial for preschool children. They consider music to be one of the most important means to promote preschool children’s learning potential. From an interaction design point of view, music provides opportunities to engage children in collaborative play which in return is beneficial for their cognitive and physical development. I argue that tangible interaction can facilitate such collaborative and playful musical activities among preschool children and in the scope of this thesis, I explore how this can be achieved. Through the exploration of related projects in this area and my own design experiments at a preschool, I propose a design concept of a modular musical toy for children which I created and then tested in a preschool context with children of different ages. Along the way, I reflect on the peculiarities of children’s behaviors and the aspects of conducting design research with preschool children, since acknowledging these aspects is crucial for working with children as a designer.