This paper talks about puppets and their usage in working with children of early and preschool age, which is very significant. Puppets affect the overall development of the child and serve as skilled assistants to preschool teachers, but also to other people who work with children. The development of speech, positive traits, positive self-images, cognitive development, development of imagination and creativity are just some of the areas in which a puppet shows its abilities. They are excellent intermediaries in communicating with the child so that they facilitate a good exchange of information between him and the adults. There is a number of ways a puppet can be used to encourage children’s development, and one of them is the dialogic drama with puppets that is also described in the paper. Basic information about different types of puppets is given, but the focus is on the Guignol puppet that belongs to the group of hand puppets because the animator uses it by putting it on his hand and he moves the puppet's head and hands with his fingers. They are known for their rapidity, simplicity and mobility, which is why they are often preferred for usage over other kinds of puppets. It talks about the origin of Guignol and its place in the history of puppetry, where does it come from and how did it get its name. The work also talks about famous characters through different countries which were embodied in hand puppets - Guignols. The paper describes the way of moving this type of puppet, the ways in which it can say something with its facial expression or movement and the stage space in which it can be used. The process of making a Guignol puppet is also described in detail and supported by the making of two puppets - characters from the fairy tale Snow White and the Seven Dwarfs.