Archaeologists have proposed that behavioral knowledge of a tool can be conceptualized as a ‘recipe’—a unit of cultural transmission that combines the preparation of raw materials, construction, and use of the tool, and contingency plans for repair and maintenance. This parallels theories in cognitive psychology that behavioral knowledge is hierarchically structured—sequences of actions are divided into higher level, partially independent subunits. Here we use an agent-based simulation model to explore the costs and benefits of hierarchical learning relative to holistic learning, where entire behavioral sequences are learned in an all-or-nothing fashion, and diffusionist learning, where actions are completely independent. Hierarchical learning is favored under the reasonable assumptions that learning is associated with some degree of both error and cost, and that behavior can be grouped into subunits that repeat in one or more tool recipes. These general predictions can be tested in the archaeological and ethnographic record. Recent advances in evolutionary developmental biology have revealed a number of parallels between the hierarchically structured, recipe-like organization of behavioral knowledge that we examine here and the manner in which biological organisms develop.