This study investigates whether preschool-aged institution-reared children’s developmental change within one year in theory of mind, executive function, and receptive language abilities differs from their parent-reared peers from different socioeconomic backgrounds. Data were collected from 73 institution-reared, 30 parent-reared children from low socioeconomic status (SES), 36 parent-reared children from middle-SES and 60 parent-reared children from high-SES at two time points, one year apart. Our findings showed that all children showed a significant increase in theory of mind and executive function, but institution-reared group displayed significantly lower performance than all parent-reared groups at Time 2. Difference score analyses revealed that institutional care predicted poorer developmental change within one year in receptive language, holding age and sex constant, as compared to parental care. Specifically, institution-reared children displayed a significant decline and low-SES children showed no change in their receptive language over time, whereas middle- and high-SES children increased significantly.