Children with autism spectrum conditions (ASC) have difficulties recognizing others' emotions. Research has mostly focused on "basic" emotion recognition, devoid of context. This study reports the results of a new task, assessing recognition of "complex" emotions and mental states in social contexts. An ASC group (n = 23) was compared to a general population control group (n = 24). Children with ASC performed lower than controls on the task. Using task scores, more than 87% of the participants were allocated to their group. This new test quantifies complex emotion and mental state recognition in life-like situations. Our findings reveal that children with ASC have residual difficulties in this aspect of empathy. The use of language-based compensatory strategies for emotion recognition is discussed.