Mentalization refers to the ability to understand the mental states of oneself and those of others that motivate action and behavior. Mentalization has generally been linked to adaptive development and healthy functioning whereas diminished mentalization has been associated with maladaptive development and psychopathology. The vast majority of research on mentalization and developmental trajectories, however, is based on Western countries. The overall aim of this study was therefore to examine mentalizing abilities in a novel sample of 153 typically developing and atypically developing Iranian children (Mage = 9.41, SDage = 1.10, Range = 8-11, 54.2% females) recruited from a primary school and health clinic in Tehran. The children completed semi-structured interviews that were later transcribed and coded for mentalization. The parents provided reports on internalizing and externalizing symptoms, demographic information, and all formal diagnoses of the children. The results pointed at general age and sex differences across the two groups. Older children showed more adaptive mentalization compared to the younger children; boys and girls used different mentalizing strategies when facing difficult situations. The typically developing children were better at mentalizing than the atypically developing children. Finally, more adaptive mentalization was associated with lower externalizing and internalizing symptoms among all children. The findings of this study contributes with expanding mentalization research to also encompass non-Western populations and the results hold crucial educational and therapeutic implications.