Individual differences in children's talk about inner states are striking, but how should they be interpreted? This study used transcripts of preschoolers’ conversations with siblings and best friends to address this question in two ways. Our first aim was to elucidate the exact nature of individual differences by contrasting categories (emotion/desire vs. cognitive state) and referents (own vs. other/shared) of inner state talk. Our second aim was to compare performance vs. competence views of inner state talk by exploring (i) the (...) stability of individual differences in inner state talk across different relationships and (ii) the cognitive correlates of inner state talk. A sample of 44 children (mean age = 4 years 3 months) was observed for 20 minutes at home playing with a sib and for 20 minutes at school playing with a best friend. Videos were transcribed and coded for the frequency and form of inner state talk (e.g., talk about different categories of inner state, or about own vs. others’ inner states). During the school visits, children completed a set of tasks tapping theory-of-mind skills and verbal ability. Individual differences in inner state talk (especially reference to others’ inner states) were stable across relationships. There was no association between individual differences in talk about cognitive vs. emotion/desire states, although both categories of inner state talk were significantly associated with individual differences in children's theory-of-mind skills. (shrink)