Person-referring pronouns in the first and second person (I, your) have been viewed as signs of increasing social understanding in children due to their shifting reference properties. However, they are linguistically complex elements and might depend on general language development. We used longitudinal transcript data from Manchester corpus (12 children aged 2 to 3 years) to examine concurrent and predictive relations between pronouns, general language development (MLU), and social understanding (indexed by the use of mental state language). In the key analysis, social understanding but not general language was found to be a developmental precursor of first-, second- and third-person pronoun mastery. Results suggest that social understanding is needed for acquisition of all person reference, not only in first and second person. Results for first- and third-person pronouns were more similar than for second person, suggesting that social-cognitive demands of person reference go beyond shifting reference of first- and second-person.