We examined how individual differences in social understanding contribute to variability in early-appearing prosocial behavior. Moreover, potential sources of variability in social understanding were explored and examined as additional possible predictors of prosocial behavior. Using a multi-method approach with both observed and parentreport measures, 325 children aged 18-30 months were administered measures of social understanding (e.g., use of emotion words; self-understanding), prosocial behavior (in separate tasks measuring instrumental helping, empathic helping, and sharing, as well as parent-reported prosociality at home), temperament (fearfulness, shyness, and social fear), and parental socialization of prosocial behavior in the family. Individual differences in social understanding predicted variability in empathic helping and parent-reported prosociality, but not instrumental helping or sharing. Parental socialization of prosocial behavior was positively associated with toddlers’ social understanding, prosocial behavior at home, and instrumental helping in the lab, and negatively associated with sharing (possibly reflecting parents’ increased efforts to encourage children who were less likely to share). Further, socialization moderated the association between social understanding and prosocial behavior, such that social understanding was less predictive of prosocial behavior among children whose parents took a more active role in socializing their prosociality. None of the dimensions of temperament was associated with either social understanding or prosocial behavior. Parental socialization of prosocial behavior is thus an important source of variability in children’s early prosociality, acting in concert with early differences in social understanding, with different patterns of influence for different subtypes of prosocial behavior.