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Two studies (N = 108) investigated preschool children's ability to use descriptions of past and future events to infer current physical and mental states. In Study 1, stories described characters that either acquired an object or knowledge ‘yesterday’, or will acquire that object or knowledge ‘tomorrow’. Children were asked to identify which character currently possessed the object or knew the information. In Study 2, the terms ‘will’ and ‘did’ were used in the stories to identify past and future time. Ability to correctly respond in this type of task requires recognition of the different causal links past and future events have with the present. Five-year-olds consistently performed better than chance on these tasks. In contrast, 4-year-olds' performance was inconsistent across the studies. An appreciation of the fundamental distinction between descriptions of past and future events is essential to understanding the complexities of both the physical and social world. This research suggests that this understanding is acquired by 4–5 years of age.