Her research is on the development of imagination and creativity, including studies of children who invent pretend friends and adult fiction writers who develop relationships with the characters in their novels. Taylor is author of Imagination Companions and the Children Who Create Them (1999, Oxford University Press) and the editor of The Development of Imagination (2013, Oxford University Press). She is on the editorial boards of the journals Imagination, Cognition, and Personality and The American Journal of Play.