Humans frequently benefit others strategically to elicit future cooperation. While such forms of calculated reciprocity are powerful in eliciting cooperative behaviors even among self-interested agents, they depend on advanced cognitive and behavioral capacities such as prospection (representing and planning for future events) and extended delay of gratification. In fact, it has been proposed that these constraints help explain why calculated reciprocity exists in humans and is rare or even absent in other animals. The current study investigated the cognitive foundation of calculated reciprocity by examining its ontogenetic emergence in relation to key aspects of children’s cognitive development. Three-to-five-year-old children from the US (N = 72, mostly White, from mixed socioeconomic backgrounds) first completed a cognitive test battery assessing the cognitive capacities hypothesized to be foundational for calculated reciprocity. In a second session, children participated in a calculated reciprocity task in which they could decide how many resources to share with a partner who later had the opportunity to reciprocate (reciprocity condition) and with a partner who could not reciprocate (control condition). Results indicated a steep developmental emergence of calculated reciprocity between 3 and 5 years of age. Further analyses showed that measures of delay of gratification and prospection were important predictors of children’s rate of calculated reciprocity, even when controlling for age and after including a measure of verbal ability. By contrast, theory of mind abilities were unrelated to children’s reciprocal behavior. This is the first systematic investigation of essential cognitive capacities for calculated reciprocity. We discuss prospection and delay of gratification as two domain-general capacities that are utilized for calculated reciprocity and which could explain developmental as well as species-differences in cooperation.