Gender nonconforming (GN) children are at higher risk of experiencing bullying and social exclusion than are gender conforming (GC) children. Nonetheless, very little is known about the socio-cognitive mechanisms underlying children's bias against GN peers. The present study was the first to examine children's dehumanization of GN peers (developmental trajectory, form, and link to bullying). Chinese children in Hong Kong (N = 472; in four age groups: 5-6, 7-8, 9-10, and 11-12 years) were assessed individually in an in-person experimental study. Children were shown experimentally manipulated vignettes of four hypothetical peers (GC boy, GC girl, GN boy, and GN girl). Next, children's blatant and subtle dehumanization of these peers, and their propensity to bully these peers, were assessed. In the blatant dehumanization task, children rated how human-like/insect-like each peer was using a visual scale with a continuous slider. For subtle dehumanization, a mind perception task was used to assess the frequency and diversity of mental state words spontaneously used by children to describe videos associated with different peers. Children also completed questions assessing bullying tendency. By age 9-10 years, children dehumanized GN peers both blatantly and subtly, regardless of peer gender. Older children rated GN peers as less human-like/more insect-like than GC peers and also spontaneously attributed fewer and less diverse mental states to GN peers than to GC peers. According to multilevel moderated mediation analyses, blatant dehumanization partially explained older children's tendency to bully GN peers. Further research may develop interventions aimed at reducing children's dehumanization of GN peers.