My son is 2.5 and 37 inches tall.  We went with the 3T and they fit him well.  He loves these shirts so much that I have to keep them constantly washed so that he can wear them day after day after day.  It would probably be easier to just buy a different batch, but he'll probably shift to liking another show by that point.  The material is fine, especially after a few washes.  These get a lot of use at our house, but the graphics still look pretty good.