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This study explored the abilities of 6-8 year-olds to understand characters’ emotions during a fictional narrative task. A fictional narrative is a depiction of events, which possess characteristic elements of a story such as; a setting, theme, and protagonist with a goal, whose progress towards that goal is facilitated or impeded by the events in the story (Alexander, Miller, & Hengst, 2001; Kintsch & van Dijk, 1978; Mar & Oatley, 2008). Narratives provide a unique outlet to understand social-cognitive development, as fictional narratives require the integration of the narrator’s knowledge of real-world influences on psychological states to make inferences about characters’ thoughts and subsequent actions (Aldrich & Brooks, 2017). In this study, children (n=212) between the ages of 6 and 8 years old [Mage= 91.55 months (7 years), SD= 10.15] were asked to tell a story from a wordless picture book. Narratives were evaluated for overall quality using a coding scheme that identified morphological errors, use of complex syntax and evaluative devices, and references to the theme and story components. In addition, narratives were evaluated for social-cognitive understanding using a coding scheme that identified objective references to the illustrated content in the book (e.g. “the boy is sleeping”), and subjective references, which indicate understanding of the characters intellectual, perceptual, or affective state (e.g. “the boy didn’t know the frog snuck out while he was sleeping”). Examples of subjective references included statements of intention, use of perceptual terms, mental state terms, affect terms, and indirect expressions of emotions. Results demonstrated that subjective expressions referencing the characters’ mental states and both direct, and indirect references to emotions, were used significantly more in older children. A latent profile analysis demonstrated that 3 profiles of objective and subjective references emerged. Age and gender were included in the model as covariates. The first profile was composed of children who used low rates of objective statements, and low rates of subjective statements (low-low), the second was of children who used high rates of objective statements, and low rates of subjective statements (high-low), and the third was of children who used high rates of objective statements and high rates of subjective statements (high-high). The model with a fourth profile of low rates of objective, and high rates of subjective statements (low-high) was not significant. Group membership was included in a regression analysis with overall narrative comprehension, and the results demonstrated that membership in the high-high group was a predictor of overall narrative quality. The findings from this study demonstrate that use of subjective references in fictional narratives significantly increases between the ages of 6 and 8. Additionally, these findings demonstrate that use of subjective references to the character’s mental state and emotions follows a developmental trend, as these references tend to emerge in older children who also competently use objective references to the events in the story. Children who proficiently incorporate both of these references into fictional narratives have the highest scores for quality and comprehension.