Theory of mind requires belief- "and" desire-understanding. Event-related brain potential (ERP) research on belief- and desire-reasoning in adults found mid-frontal activations for both desires and beliefs, and selective right-posterior activations "only" for beliefs. Developmentally, children understand desires before beliefs; thus, a critical question concerns whether neural specialization for belief-reasoning exists in childhood or develops later. Neural activity was recorded as 7- and 8-year-olds (N = 18) performed the same diverse-desires, diverse-beliefs, and physical control tasks used in a previous adult ERP study. Like adults, mid-frontal scalp activations were found for belief- "and" desire-reasoning. Moreover, analyses using "correct" trials alone yielded selective right-posterior activations for belief-reasoning. Results suggest developmental links between increasingly accurate understanding of complex mental states and neural specialization supporting this understanding. (Contains 5 figures, 4 tables, and 1 footnote.)