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The first aim of this study was to examine various aspects of Theory of Mind (ToM) development in young children with moderate hearing loss (MHL) compared with hearing peers. The second aim was to examine the relation between language abilities and ToM in both groups. The third aim was to compare the sequence of ToM development between children with MHL and hearing peers.Forty-four children between 3 and 5 years old with MHL (35 to 70 dB HL) who preferred to use spoken language were identified from a nationwide study on hearing loss in young children. These children were compared with 101 hearing peers. Children were observed during several tasks to measure intention understanding, the acknowledgement of the other’s desires, and belief understanding. Parents completed two scales of the child development inventory to assess expressive language and language comprehension in all participants. Objective language test scores were available from the medical files of children with MHL.Children with MHL showed comparable levels of intention understanding but lower levels of both desire and belief understanding than hearing peers. Parents reported lower language abilities in children with MHL compared with hearing peers. Yet, the language levels of children with MHL were within the average range compared with test normative samples. A stronger relation between language and ToM was found in the hearing children than in children with MHL. The expected developmental sequence of ToM skills was divergent in approximately one-fourth of children with MHL, when compared with hearing children.Children with MHL have more difficulty in their ToM reasoning than hearing peers, despite the fact that their language abilities lie within the average range compared with test normative samples.