The most popular topic in theory-of-mind research has been first-order false belief: the realization that it is possible to hold false beliefs about events in the world. A more advanced development is second-order false belief: the realization that it is possible to hold a false belief about someone else's belief. This article reviews research directed to second-order false belief and other forms of higher order, recursive mentalistic reasoning. Three general issues are considered. Research directed to developmental changes indicates that preschoolers typically fail second-order tasks and that success emerges at about age 5 or 6, although results vary some with method of assessment. Research directed to the consequences of second-order competence has revealed positive relations with a number of other aspects of children's development. Finally, measures of both language and executive function relate positively to performance on second-order tasks; the causal bases for the correlations, however, remain to be established. This article concludes with suggestions for future research. (Contains 6 tables and 5 footnotes.)