Sibling relationship quality and social understanding (second-order false belief, conflict interpretation, and narrative conflict perspective references) were examined as unique and interactive correlates of sibling conflict behavior in 62 dyads (older M age = 8.39 years and younger M age = 6.06 years). High-quality relationships were associated with positive conflict processes. Younger siblings' second-order false belief scores were negatively associated with constructive conflict strategies, and older siblings' narrative self-referential focus was negatively associated with compromise. Associations between younger children's social understanding (conflict interpretation and narrative perspective references) and siblings' dyadic conflict behavior were moderated by relationship quality. Results suggest that links between social understanding and conflict behavior should be considered in conjunction with the quality of children's relationships.