Two studies investigated the influence of age, language, and family background on the development of preschoolers' social cognitive skills. Study 1 examined variability in economically disadvantaged preschoolers' understanding of fantasy and evaluated the relation of age and language to children's skill in this area. Children were shown drawings of fantasy and real-life events and asked if the event could happen in real life and to justify their responses. Children were more likely to answer correctly when the drawing depicted real-life events. Age and language were positively related to children's overall understanding of fantasy. In Study 2, both low-and middle SES preschoolers were included and two false belief understanding measures were added to the battery of tasks. As before, age and language were related to fantasy understanding as well as to false belief performance. In addition, SES was predictive of fantasy understanding, but not false belief performance, regardless of how it was assessed. Social competence was unrelated to the social cognitive variables, even when the effects of age, language, and SES were controlled.