Child language and parent discipline mediate the relation between family income and false belief understanding

•Parent discipline predicted children’s false belief understanding.•Children with better vocabulary scores had better false belief understanding.•Children with higher family income had higher false belief understanding.•This relation was explained by parent discipline and child vocabulary.•Child vocabulary was a better explanation for the income–false belief relation. Achieving false belief understanding is an important cognitive milestone that allows children to understand that thoughts and reality can differ. Researchers have found that low-income children score significantly lower than middle-income children on false belief understanding but have not examined why this difference exists. We hypothesized that children’s language and parent discipline mediate the income–false belief relation. Participants were 174 3- to 6-year-olds. False belief understanding was significantly correlated with family income, children’s vocabulary, parents’ self-reported discussion of children’s behavior, discussion of emotions, and power assertion. Family income had a significant indirect effect on false belief understanding through children’s vocabulary and parent discipline when examined independently, but only through children’s vocabulary when using parallel multiple mediation. This study contributes to our knowledge of individual differences in false belief understanding.