OBJECTIVE Early childhood is an important developmental period to focus on the outcomes associated with ethnic-racial identity (ERI) given that children notice racial differences, are processing information about ethnicity and race, and have race-related experiences. The present study tested whether three components of ERI (i.e., positive attitudes, negative attitudes, and centrality) predicted children's social functioning (i.e., interactive, disruptive, and disconnected play with peers; externalizing behaviors; and observed frustration and cooperation with an adult). Child sex was also tested as a moderator. METHOD The present study included 182 5-year-old Mexican-origin children (57% male) of mothers who entered parenthood during adolescence (M = 21.95, SD = 1.00). RESULTS Children's positive ethnic-racial attitudes were associated with greater social functioning (i.e., greater interactive play and less externalizing behaviors) among boys and girls, and less frustration among boys. Negative ethnic-racial attitudes predicted maladaptive social functioning (i.e., greater disruptive play) among boys and girls and more disconnected play among girls. Contrary to expectations, ethnic-racial centrality predicted boys' and girls' maladaptive social functioning (i.e., greater disruptive and disconnected play). CONCLUSIONS Findings highlight the importance of fostering children's positive ethnic-racial attitudes and helping them discuss and cope with negative ethnic-racial attitudes to promote more adaptive social functioning. (PsycInfo Database Record (c) 2021 APA, all rights reserved).