The current investigation examined associations between parent-child emotion discourse, children's independent social information processing, and children's psychosocial functioning in 146 families of 8-year-old children with and without developmental delays. Children's emergent social-cognitive understanding (e.g., internal state understanding, perspective taking, and causal reasoning/problem solving) was coded in the context of parent-child conversations about emotion, and children were interviewed separately to assess attributional biases and social problem solving skills. Mothers, fathers, and teachers reported on children's socioemotional outcomes. Although children with delays demonstrated poorer overall functioning across domains, evaluation of a strengths-based model indicated important process-level similarities between developmental status groups. Structural equation modeling revealed key adaptations in parent-child discourse and in children's social information processing that related to positive social skills outcomes for all children. Social-cognitive factors also partially accounted for developmental status group differences in social skills, highlighting these domains as important entry points for prevention and intervention efforts, particularly for children with developmental risk. Findings related to maladaptive processes were more limited. Implications for future research are discussed.