Despite growing interest in Theory of Mind (ToM) tasks for evaluating language models (LMs), little is known about how LMs internally represent mental states of self and others. Understanding these internal mechanisms is critical - not only to move beyond surface-level performance, but also for model alignment and safety, where subtle misattributions of mental states may go undetected in generated outputs. In this work, we present the first systematic investigation of belief representations in LMs by probing models across different scales, training regimens, and prompts - using control tasks to rule out confounds. Our experiments provide evidence that both model size and fine-tuning substantially improve LMs' internal representations of others' beliefs, which are structured - not mere by-products of spurious correlations - yet brittle to prompt variations. Crucially, we show that these representations can be strengthened: targeted edits to model activations can correct wrong ToM inferences.

Most existing Theory of Mind (ToM) benchmarks for foundation models rely on variations of the Sally-Anne test, offering only a very limited perspective on ToM and neglecting the complexity of human social interactions. To address this gap, we propose ToM-SSI: a new benchmark specifically designed to test ToM capabilities in environments rich with social interactions and spatial dynamics. While current ToM benchmarks are limited to text-only or dyadic interactions, ToM-SSI is multimodal and includes group interactions of up to four agents that communicate and move in situated environments. This unique design allows us to study, for the first time, mixed cooperative-obstructive settings and reasoning about multiple agents' mental state in parallel, thus capturing a wider range of social cognition than existing benchmarks. Our evaluations reveal that current models' performance is still severely limited, especially in these new tasks, highlighting critical gaps for future research.