Children develop in a sea of reciprocal social interaction, but their brain development is predominately studied in non-interactive contexts (e.g., viewing photographs of faces). This dissertation investigated how the developing brain supports social interaction. Specifically, novel paradigms were used to target two facets of social experience—social communication and social motivation—across three studies in children and adults. In Study 1, adults listened to short vignettes—which contained no social information—that they believed to be either prerecorded or presented over an audio-feed by a live social partner. Simply believing that speech was from a live social partner increased activation in the brain’s mentalizing network—a network involved in thinking about others’ thoughts. Study 2 extended this paradigm to middle childhood, a time of increasing social competence and social network complexity, as well as structural and functional social brain development. Results showed that, as in adults, regions of the mentalizing network were engaged by live speech. Taken together, these findings indicate that the mentalizing network may support the processing of interactive communicative cues across development. Given this established importance of social-interactive context, Study 3 examined children’s social motivation when they believed they were engaged in a computer-based chat with a peer. Children initiated interaction via sharing information about their likes and hobbies and received responses from the peer. Compared to a non-social control, in which children chatted with a computer, peer interaction increased activation in mentalizing regions and reward circuitry. Further, within mentalizing regions, responsivity to the peer increased with age. Thus, across all three studies, social cognitive regions associated with mentalizing supported real-time social interaction. In contrast, the specific social context appeared to influence both reward circuitry involvement and age-related changes in neural activity. Future studies should continue to examine how the brain supports interaction across varied real-world social contexts. In addition to illuminating typical development, understanding the neural bases of interaction will offer insight into social disabilities such as autism, where social difficulties are often most acute in interactive situations. Ultimately, to best capture human experience, social neuroscience ought to be embedded in the social world.