The aim of the current study was to address the potential moderating roles of emotional display rule knowledge and race in the relation between false-belief understanding and preschoolers' positive interactions and behaviors with peers and teachers. Participants included 87 African American and Latinx preschoolers (52 boys and 35 girls, mean age 51.70 months) recruited from a Head Start program. After controlling for language, false-belief understanding was positively associated with positive ratings of children's observed behavior with peers and teachers, but only for children average and low in knowledge of emotional display rules. In contrast, there was a significant and positive association between false-belief understanding and teacher ratings of challenging child behavior, but only for children with high emotional display rule knowledge. We also found that associations among false-belief understanding, emotional display rule knowledge, and children's positive classroom interactions were influenced by child race. Findings are interpreted in light of the different levels of conceptual processing involved in core components of cognitive and affective dimensions of social understanding.