The ability to talk about the internal states (IS) of self and other is an age-typical development of early childhood that is thought to reflect young children's emergent self-other understanding. This study examined the emergence of an IS lexicon in a cross-sectional sample of young children with Down syndrome (DS) and a cognitively and demographically comparable group of normally developing (ND) children. Children's IS lexicons were derived from transcripts of their spontaneous utterances during two laboratory contexts: a mother-child emotions picture book task and semistructured play. Children with DS produced significantly fewer IS words and fewer IS word types than their MA-matched counterparts. Controlling for corpus size, children with DS also were less likely to attribute internal states to themselves and were more context bound in their use of IS language. In addition, children with DS also differed from ND children in the semantic content of their IS language, with proportionately higher rates of affective words and lower rates for words about volition, ability, and cognition. For both the DS and ND groups, individual differences in IS language production were significantly related to general expressive language skills. However, dissociations were observed for the relation between children's IS word production and nonverbal symbolic play skills in the two groups. These findings suggest some degree of disorganization at the interface among symbolic domains for children with DS. Because IS language is critical to the regulation of social interaction and an early index of self-other differentiation and understanding, children with DS may be at risk for later compromises in self-organization.