Australia is experiencing rapid population ageing, and consequently an increasing proportion of older adults are taking on grandparenting roles. While grandparenting is known to benefit psychological well-being and broader cognitive function, its potential contribution to maintaining social cognitive function in later life remains unexplored. Social cognitive function refers to the capacities involved in detecting, understanding and responding to social cues, and therefore plays a crucial role in social functioning. Understanding whether family roles, such as grandparenting, support social cognition is important given the central role these abilities play in social participation, independence, and healthy ageing. This study examined whether engagement with grandchildren is associated with social cognition in older adulthood, and whether the type of engagement matters (i.e., social contact versus caregiving). Data were drawn from more than 400 adults aged 60+ participating in the Social Cognition in Ageing Longitudinally (SoCiAL) project. Participants reported hours spent (i) socialising with and (ii) caring for grandchildren, and completed validated measures of social cognition. Results showed a small but significant association between grandparenting activity and social cognition. Importantly, type of engagement was important, with caregiving but not contact, uniquely predicting social cognition scores. These findings provide the first evidence that active grandparenting may support social cognitive functioning in later life. Supporting opportunities for meaningful intergenerational engagement may therefore represent a promising pathway for promoting social cognitive health and broader well-being in ageing populations.