Previous research has investigated children’s lie-telling behavior, and adults’ lie detection abilities. Less work has examined children’s ability to accurately identify a lie from others’ statements, and the factors that may impact this skill. The current study aimed to investigate the developmental course of children’s lie detection ability, and the role that a child’s age, theory of mind comprehension, and exposure to socially conforming and authoritarian parenting may have on children’s detection accuracy. Analyses revealed that children’s accuracy in detecting lies within statements made by other children improved with age. Additionally, three to four-year olds held truth biases towards statements made by both other children and adults. This work highlights the importance of lie detection as a developmental marker in children’s social cognition and can have significant forensic implications.