Having internal conflicting desires is a frequent life experience. Despite the abundant literature on children's understanding of simple mental states, little is known about their reasoning about conflicting desires. Across six studies, from developmental, social-cognitive and cross-cultural perspectives, the present dissertation investigates the development of understanding internal conflicts, sociocultural influences in its development, as well as its links with children's socioemotional development. In Part 1, to examine the development of understanding conflicting desires, 4- to 7-year-old U.S. children were told stories in which the character had an overall goal (e.g., lose weight) and a conflicting immediate preference (e.g., like chocolate but not broccoli). When asked to predict the character's action, 6- to 7-year-olds predicted she would act according to the main goal, whereas younger children predicted she would act to satisfy the immediate desire. In Part 2, to investigate cultural influence on the development, Chinese children's understanding was examined. Five-year-old Chinese children gave goal-oriented responses to the conflicting desire stories, at least one year earlier than their American counterparts. Part 3 explored links between understanding of conflicting desires and social-emotional development. U.S. and Chinese children's key socioemotional characteristics were measured by peer nominations, teacher-ratings and self-reports. Associations between understanding of conflicting desires and positive socioemotional adjustments were found among Chinese children, but not among U.S. children. The present findings suggest that an understanding of internal conflicting desires develops during childhood, facilitated by relevant sociocultural input. In the context where dealing with internal conflicts is emphasized early in life, better understanding of internal conflicts is related with positive socioemotional development.