ABSTRACT: BACKGROUND:Positive mental health may support healthy development in childhood, although few studies have investigated this at a population level. We aimed to construct a measure of mental health competence (MHC), a skills-based assessment of positive mental health, using existing survey items in a representative sample of UK children, and to investigate its overlap with mental health difficulties (MHD), socio-demographic patterning, and relationships with physical health and cognitive development. METHODS:We analysed the UK Millennium Cohort Study (MCS) when children were aged 11?years. Maternal (n =?12,082) and teacher (n =?6739) reports of prosocial behaviours (PS) and learning skills (LS) were entered into latent class models to create MHC measures. Using descriptive statistics, we examined relationships between MHC and MHD, and the socio-demographic patterning of MHC. Associations between MHC and physical health and cognitive development were examined with relative risk ratios [RRR] (from multinomial models): BMI status (healthy weight, overweight, obesity); unintentional injuries since age 7 (none, 1, 2+); asthma symptoms (none, 1, 2+); and tertiles of test scores for verbal ability, spatial working memory and risk-taking. Models were adjusted for potential confounding. RESULTS:Four MHC classes were identified [percentages for maternal and teacher reports, respectively]: high MHC (high PS, high LS) [37%; 39%], high-moderate MHC (high PS, moderate LS) [36%; 26%]; moderate MHC (moderate PS, moderate LS) [19%; 19%]; low MHC (moderate PS, low LS) [8%; 16%]. Higher MHC was less common in socially disadvantaged children. While MHC and MHD were associated, there was sufficient separation to indicate that MHC captures more than the absence of MHD. Compared to children with high MHC, those in other MHC classes tended to have poorer physical health and cognitive development, particularly those with low MHC or high-moderate MHC. For example, children with maternal-report Low MHC were more likely to have experienced 2+ unintentional injuries (RRR: 1.5 [1.1-2.1]) and to have lower verbal ability scores (RRR: 2.5 [1.9-3.2]). Patterns of results were similar for maternal- and teacher-report MHC. CONCLUSION:MHC is not simply the inverse of MHD, and high MHC is associated with better physical health and cognitive development. Findings suggest that interventions to improve MHC may support healthy development, although they require replication.