This study examines the role that context plays in links between relative balance, or mutuality in parent-child interaction and children's social competence. Sixty-three toddlers and their parents were observed in a laboratory play session and caregiving activity (i.e. eating snack). Mutuality was operationalised as the relative balance in (a) partners' compliance to initiations, and (b) partners' expression of positive emotion. Caregivers rated children's social competence with peers, and children's prosocial and aggressive behaviour with peers was observed in their childcare arrangement. Contextual differences were observed in the manifestation of parent-child mutuality, with both mother-child and father-child dyads displaying higher mutual compliance scores in the play context than in the caregiving context. Father-child dyads also displayed higher levels of shared positive emotion during play than during the caregiving context. There were no differences in a way that parent-child mutuality during play and caregiving was associated with children's social competence with peers. Overall, the results suggest that parent-child mutuality is a quality of parent-child interaction that has consistent links to children's peer competence regardless of the context in which it occurs. (Contains 2 tables.)