Children may incorporate misinformation into reports of witnessed events, particularly if the misinformation is repeated. One explanation is that the misinformation trace is strengthened by repetition. Alternatively, repeating misinformation may reduce the discriminability between event and misinformation sources, increasing interference between them. We tested trace strength and distinctiveness accounts by showing 5- and 6-year-olds an event and then presenting either the "same" or "varying" items of post-event misinformation across three iterations. Performance was compared to a baseline in which misinformation was presented once. Repeating the same misinformation increased suggestibility when misinformation was erroneously attributed to both event and misinformation sources, supporting a trace strength interpretation. However, suggestibility measured by attributing misinformation solely to the event, was lower when misinformation was presented repeatedly rather than once. In contrast, identification of the correct source of the event was less likely if the misinformation was repeated, whether the same or different across iterations. Thus a reduction in the distinctiveness of sources disrupted memory for the event source. Moreover, there was strong association between memory for the event and a measure of distinctiveness of sources, which takes into account both the number of confusable source and their apparent temporal spacing from the point of retrieval.