We explore the developmental paradox of false belief understanding. This paradox follows from the claim that young infants already have an understanding of false belief, despite the fact that they consistently fail the elicited-response false belief task. First, we argue that recent proposals to solve this paradox are unsatisfactory because they (i) try to give a full explanation of false belief understanding in terms of a single system, (ii) fail to provide psychological concepts that are sufficiently fine-grained to capture the (...) cognitive requirements for the various manifestations of false belief understanding, and (iii) ignore questions about system interaction. Second, we present a dual-system solution to the developmental paradox of false belief understanding that combines a layered model of perspective taking with an inhibition-selection-representation mechanism that operates on different levels. We discuss recent experimental findings that shed light on the interaction between these two systems, and suggest a number of directions for future research. (shrink)