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Humans’ evolutionary success has depended in part on their willingness to punish, at personal cost, bad actors who have not harmed them directly—a behavior known as costly third-party punishment. The present studies examined the psychological processes underlying this behavior from a developmental perspective, using a novel, naturalistic method. In these studies (ages 3–6, total N = 225), participants of all ages enacted costly punishment, and rates of punishment increased with age. In addition, younger children (ages 3–4), when in a position of authority, were more likely to punish members of their own group, whereas older children (ages 5–6) showed no group- or authority-based differences. These findings demonstrate the developmental emergence of costly punishment, and show how a sense of authority can foster the kind of group-regulatory behavior that costly punishment may have evolved to serve.