In 30+ years of teaching private & classroom music, I have never had a guitar student younger than 5--however that does not mean that there is no 5 yr old capable of learning. If you were to use a half size decent guitar (somewhat of a trick in & of itself!), and first teach what I call the E-Z chords, which are modified versions of the 1st to 4th strings only (the four highest pitched strings), and use standard tuning, it might work out. If one begins guitar lessons on an abnormal tuning, it is less likely that one would easily move to standard tuning on all 6 strings. If you remove the 6th & 5th strings, (then one would not strum the other strings not being fingered, which can make a horrific sound when strummed with the modified chord!) then you can use one or two (or three at the most, after getting the index & middle finger going) fingers for chords. For example, using just the 1st -4th strings, the modified G chord would be played with one finger on the 1st string in the 3rd fret. I have used this quite successfuly with the 6-7 yr olds who have very small fingers with less developed motor skills, and some handicapped kids. However, the guitar is not the only kid friendly instrument! The Mountain Dulcimer is great for smaller kids, & they make smaller versions, too. It's easy, as the motes in the scale are right in front of you (kind of like there are no "black keys"), and reading the tablature for playing melody & letting the other 2 strings drone is much easier for most kids than guitar. Also, the mandolin is a small instrument, and smaller fingers fit well. It would be taught as a melody instrument, and only later on as the motor skills develop chords can be added. The best musical instruments for the very young are ones which can be easily manipulated by little ones (as they do NOT have very well developed motor skills) such as various Orff instruments, played with mallots, especially the pentatonic ones so that there are no "wrong" notes, drums, and the so-called "rhythm" instruments mentioned above. Also, using the washboard or guiro, for example, helps a kid to keep a stead beat, and the concept of strumming an instrument to a steady beat. Do not forget that when we teach music, we must teach basic concepts of all aspects of music-melody, rhythm, playing, singing, moving to music, timbre--and use a variety of ways to help them understand these concepts. Good Luck!