The purposes of this research were to understand children’s perception of happiness and to propose suggestions for improving the level of happiness based on children's needs by analyzing individual interviews about what makes them happy and why. The subjects of the study were 163 children aged three to five at two kindergartens and one daycare center in Seoul, South Korea. Research results were as follows. First, they indicated living things (human, animal, plant) and inanimate things (plaything, school supply/book, tool/machine, accessory, food, property) as the objects that make them happy. The most frequently indicated objects that make children happy included plaything (toy) (31.9%), human (12.3%), school supply/book (10.6%). Secondly, the reason why specific objects make children happy was because those objects provided satisfaction with desire for play, emotional satisfaction, practical satisfaction, esthetic satisfaction, satisfaction with desire for creation, and moral satisfaction. The most frequent reason regarding why they become happy was because they could play with playthings, and felt fun or good when they play. The identified playthings that make children happy and satisfy their various needs were those which they could easily find at home and in the early childhood institutes. Such results suggest that children's happiness could be positively influenced by the setting where they could freely play while interacting with meaningful things.