One hallmark of human cognition is the ability to attribute mental states to others, i.e. to construct a ‘theory of mind’ of others. This ability to understand people as guided by an inner, mental world made of beliefs, desires, and intentions pervades our social world and motivates many of our decisions and behaviour. However, past research on theory of mind has focused on its development and abnormal forms while only a few studies have looked at how normal adults use a fully developed theory of mind. Thus, it remains rather unclear how and when the normal theory of mind is deployed, and which selective forces favoured the evolution of a theory of mind uniquely in humans rather than in various other animal species. With this project, we aim to study theory of mind usage in social contexts in order to understand its potential role in the evolution of cooperation in humans. Humans can be strikingly more cooperative than any other species, particularly with unrelated individuals, precluding kin selection as a potential explanation for this increase in helping behaviour. In this context, it is a major challenge for evolutionary scientists to understand why humans often behave more cooperatively in laboratory based economic games than predicted by either evolutionary game theory or its economic equivalent “homo economicus”, which both assume maximal monetary gain as the goal in cooperation. Interestingly, humans are not indiscriminately helpful: social factors are highly influential. One powerful social force is perceived group membership in that we help and cooperate more with in-group members. Given that between-group competition is a major selective force in human evolutionary history, the evolution of utility functions other than maximal monetary gain during interactions with in-group members may have been under positive selection. We propose to test the hypothesis that theory of mind interacting with group membership provides a mechanism to facilitate cooperative strategies when dealing with in-group members and more competitive strategies when dealing with out-group members. We predict that differential use of theory of mind is what underlies the ability to understand and subsequently predict behaviour in the different cooperative contexts exemplified in economic games. Our methods combine tools from cognitive and social psychology with evolutionary biology. A first diary study will provide a baseline measure of both spontaneous cooperation in the natural world and the effect of group membership on spontaneous theory of mind. In an experimental phase we will use three economic games that differ in the degree of potential conflict between partners: the prisoner’s dilemma game (maximal conflict), the stag hunt game (a coordination game), and a by-product mutualism game (maximal cooperation). We will then employ a paradigm designed for this project to gauge spontaneous cognition in a naturalistic physical coordination task. Perceived group membership will be manipulated to study how categorization influences the cognition involved in cooperation. In a second set of experiments we will test the causal role of theory of mind in cooperation by priming participants to perceive their partner in either dehumanised or mentalistic terms before playing the three games. In all experiments, linguistic communication will be controlled and compared. In addition, we will take saliva samples before and after experiments to assess how our manipulations affect participants’ physiological state, measuring two neurohormones (oxytocin and vasopressin) known to affect human helping behaviour. By introducing cognitive psychology to the analysis of cooperative (and competitive) interactions we hope to understand the usage of theory of mind in social contexts, its potential effects on physiology, and the variation in human cooperative behaviour. Results will inform both social scientists and biologists as to how our distinctly human cognition has helped us achieve our uniquely evolved cooperation.