Reading aloud to young children can positively impact their social and emotional development during preschool. However, further exploration is needed to determine how drama-based read-alouds (DBRAs) could enhance these benefits. In this sense, this study examined the effects of the DBRA intervention on preschoolers' social understanding, social problem-solving skills, and peer relationships. Seventy preschool children aged between 52 and 72 months (37 girls, M = 62.71 months, SD = 5.37) participated in a pretest-posttest non-equivalent control group intervention design. During the intervention, teachers conducted DBRA sessions 3 days a week for 8 weeks. Multilevel analysis revealed that DBRAs significantly improved children's social understanding and social problem-solving skills. While no significant changes were observed in peer relationships and social skills, there was a notable reduction in aggression among the intervention group. These findings highlight the potential of DBRAs as a valuable tool for promoting social competence in early childhood education.