Background: The aim of this study was to examine the relationship between language and theory of mind in children with autistic spectrum disorders (ASD) and children with moderate learning difficulties (MLD). Previous studies have found a strong association between language and theory of mind in a range of groups, but mostly have not included measures of both grammar and vocabulary; including these enables us to speculate about the causal direction of the relationship. Methods: Fifty-eight children with ASD and 118 children with MLD were given standardised assessments of vocabulary and grammar, along with standard theory of mind tasks. Results: The relationship between language and theory of mind was more evident in children with ASD than in those with MLD, and grammar was a particularly strong predictor of theory of mind performance in children with ASD. Children with MLD performed better on false belief (FB) tasks than did children with ASD, and their performance was more predictable across the different theory of mind tasks. Conclusions: Language, in particular grammar, and theory of mind appear to be more strongly related in children with ASD than in those with MLD. We speculate that this relationship may be causal, with some grammatical understanding being a precursor of theory of mind. The implications of these findings are discussed in relation to possible routes for compensatory strategies for mentalising in children with ASD.