This paper explores the differences between the understanding or knowledge of certain social rules, and their use, as seen in pronoun selection, by children in two different social settings within the same culture area. Different philosophies concerning the interdependence of social, cognitive, and linguistic development are reviewed. The specific study described involved three age groups of Hungarian children living in two different locations. They were required to complete a multiple-choice test and a role-playing test, designed to examine the interrelationships between the acquisition of social and linguistic rules, and the development of logical structures, based on the complexity of the Hungarian personal pronoun system. It was assumed that different social environments affect both the acquisition of sociolinguistic knowledge and role-taking ability, so that the two areas chosen differed in the areas of the adult role system and the amount of verbal and social interaction to which the children were exposed. Results indicate that though there are noticeable differences in the overall performance of the two groups, both groups performed better on the multiple-choice test than in role playing. Social environment has limited effect on knowledge of appropriate forms, while it definitely influences ability to use proper forms. (CLK)