We present a framework for discussing two major aspects of social cognition: the ability to predict what another person is like and what another person is likely to do next. In the first part of this review, we discuss studies that concern knowledge of others as members of a group and as individuals with habitual dispositions. These include studies of group stereotypes and of individual reputation, derived either from experience in reciprocal social interactions such as economic games or from indirect observation and cultural information. In the second part of the review, we focus on processes that underlie our knowledge about actions, intentions, feelings and beliefs. We discuss studies on the ability to predict the course of motor actions and of the intentions behind actions. We also consider studies of contagion and sharing of feelings. Lastly, we discuss studies of spatial and mental perspective taking and the importance of the perception of communicative intent. In the final section of this review, we suggest that the distinction between top-down and bottom-up processes, originally applied to non-social cognitive functions, is highly relevant to social processes. While social stimuli automatically elicit responses via bottom-up processes, responses to the same stimuli can be modulated by explicit instructions via top-down processes. In this way, they provide an escape from the tyranny of strong emotions that are readily aroused in social interactions.