Based on caregiver report, children with prenatal alcohol exposure have difficulty with social functioning, but little is known about their social cognition. The current study assessed the social information processing patterns of school-age children with heavy prenatal alcohol exposure using a paradigm based on Crick and Dodge’s reformulated six-stage model. Fifty-two children (aged 7–11) with and without heavy prenatal alcohol exposure were tested using a structured interview measure of social information processing involving 18 videotaped vignettes of children in group entry and provocation situations. Alcohol-exposed children displayed maladaptive processing patterns on the goal, response generation, and response evaluation steps in group entry situations, and encoding, attribution, response evaluation, and enactment steps during provocation situations. Children with heavy prenatal alcohol exposure also had difficulty on the Test of Problem Solving, and performance correlated with social information processing measures. Such difficulties may lead to problems in social functioning and warrant early intervention.