Although there is widespread recognition that arts experiences enhance children's social-emotional development, the mechanisms through which this process takes place are little understood. This article provides insight into the role of the arts in development, through a review of recent research on child development and interviews with inner-city elementary teachers who have participated in an artist-in-residence program. The author presents evidence that arts experiences--and drama activities in particular--help children to develop an enhanced understanding of the responses, emotional expressions, and actions of other people, as well as a comprehension of what to expect from others and what social scripts should be used in different situations. (Contains 2 notes.)