This study aimed to investigate whether: (1) the development of "theory of mind" (ToM) is associated with social competence; and (2) social peer play is also associated with social competence in young children. Associations between ToM task performance, frequencies of observed social and solitary free-play and parent-rated social competence were investigated in three- to five-year-old Australian preschool children [N = 85 (46 F/39 M); M = 4 years 6 months, SD = 8 months]. Children's verbal ability was controlled. Children's overall performance on combined ToM tasks improved with age, but was not associated with their parent-rated level of social competence. High frequency of social-interactive play (i.e. interacting with others in a playful context) was associated with social competence. High frequency of solitary play was inversely associated with social competence and positively associated with overall problem behaviour. Results suggest the importance of social interaction during play for the development of young children's social competence. More research is needed to determine what role, if any, ToM ability has in young children's social development. (Contains 4 tables.)