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This study aimed to investigate the multidimensional nature of maternal mental state talk with respect to children’s social-behavioral functioning in a low-income urban preschool sample. Maternal speech data were collected as mothers narrated a wordless picture book depicting a diverse set of mental states to their children (n = 130, 2–4 year olds). Dimensions of maternal mental state talk (i.e., type, direction, causality) were examined with the Coding System for Mental State Talk in Narratives. Approximately half of the sample consisted of higher-risk children who were identified as in need of clinical services by on-site clinicians. Results indicated that mothers’ diversity and causality of mental state talk, their acknowledgement of characters’ negative emotions, and talk about children’s cognitions and their own mental states were associated with children’s socially adaptive behaviors. On the other hand, mothers’ tendency to focus on children’s perceptions during the story-telling task (e.g., “see that?,” “look!”) was linked with lower social competence and internalizing problems. Mothers in the clinical sample used a significantly lower proportion of emotion words compared to mothers in the nonclinical sample. Results suggest that a picture book reading task might provide a cost-effective method for assessing and possibly modifying maternal mental state talk.