Very much so. Preschoolers are an imaginative lot, and as many as two-thirds of them have imaginary friends, who come in all sizes, genders, and personalities. Some kids also have pretend animal pals.
Playing with a made-up person isn't so different from playing with action figures or dolls. In fact, imaginary friends come in very handy. A pretend pal might fill a friendship role (talk about loyalty!). Or he might be a heroic protector. A sidekick who's endowed with super strength or magical powers can lend a child a hand in controlling his fears or feelings of powerlessness. Other imaginary friends are scapegoats ("Stuart spilled the juice on the sofa!"). An imaginary friend can actually help you out, too, if he talks about things that are difficult for your child to broach on his own ("Sammy doesn't like it when Mommy's late to pick him up from preschool").
Still, it can be unsettling to sit across from an imaginary friend at the dinner table. Don't overindulge this buddy (forget the extra place-setting, for instance), or your child may feel that you're being condescending. But do show interest and acceptance ("So Sammy loves pizza, too?"). And don't worry — there's no indication that kids with imaginary friends are more likely than other kids to forgo "real" playmates. In fact, research shows that kids with imaginary friends turn out to be more cooperative, creative, independent, and happy than those without.