Interpreting others’ emotions is theoretically foundational for children’s social competence, yet little research contrasts Emotion Understanding (EU) types against their theoretical correlates. This study investigated kindergartners’ situationistic EU (attributing emotions based on external events) and mentalistic EU (attributing emotions from others’ mental states) in relation to Theory of Mind (ToM) and social skills, as rated by parents and teachers. The EU measures were expected to have low associations with one another and to relate differently to ToM and select social skills. Mentalistic EU was expected to be an important predictor of teacher-rated social skills. Results supported the hypothesis that mentalistic EU and situationistic EU are distinct constructs. However, both relate to ToM. Furthermore, while ToM and situationistic EU variables were included in the regression model, only vocabulary and mentalistic EU were significant predictors for teacher-rated social skills. Results indicate the importance of mentalistic EU in aspects of kindergartners’ social competence.