Secrets carry valuable social information. Because the content of secrets can be damaging to the secret-keeper's reputation, people should only disclose their secrets to people whom they trust. Therefore, tracking which people know each other's secrets can be used as cue of social relationships: If one person tells another person a secret, those people are likely friends. Here, in 5 studies with 3- to 12-year-old children (total N = 452), we examined the developmental trajectory of reasoning about secret sharing as an indication of third-party friendship. By age 6, but not before, children expected that a person would be friends with someone that she told a secret. We replicated this main finding across four studies by comparing secret sharing to other cues of affiliation. Children treated sharing a secret as a stronger cue to friendship than sharing a physical object (Study 1), sharing a fact (Studies 2-4), or sharing membership on the same sports team (Study 3). Although younger children did not understand that secret sharing indicated friendship, they did expect people to be more likely to disclose their secrets to friends than to nonfriends (Study 5). Taken together, our results indicate that children understand the social significance of sharing secrets and use secret sharing to make important predictions about the social world. Specifically, children infer social relationships based on which people know each other's secrets and expect others to share secrets selectivity with friends.