In the present study, we investigated the ability to parse familiar sequences of action into meaningful events in young individuals with autism spectrum disorders (ASDs), as compared to young individuals with typical development (TD) and young individuals with moderate mental retardation or learning disabilities (MLDs). While viewing two videotaped movies, participants were requested to detect the boundary transitions between component events at both fine and coarse levels of the action hierarchical structure. Overall, reduced accuracy for event detection was found in participants with ASDs, relative to participants with TD, at both levels of action segmentation. The performance was, however, equally diminished in participants with ASDs and MLDs under the course-grained segmentation suggesting that difficulties to detect "fine-grained" events in ASDs cannot be explained by a general intellectual dysfunction. Reduced accuracy for event detection was related to diminished event recall, memory for event sequence and Theory of Mind abilities. We hypothesized that difficulties with event detection result from a deficit disrupting the on-line processing of kinematic features and physical changes of dynamic human actions. An impairment at the earlier stages of the event encoding process might contribute to deficits in episodic memory and social functioning in individuals with ASDs.