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Current understanding of how culture relates to the development of children's gender‐related peer preferences is limited. To investigate the role of societal acceptance of gender nonconformity, this study compared children from China and Thailand. Unlike China and other cultures where the conceptualization of gender as binary is broadly accepted, individuals who identify as a nonbinary "third" sex/gender have been highly visible and tolerated in Thai society for at least several decades. Chinese and Thai 4‐ to 9‐year‐olds (N = 458) viewed vignettes of four hypothetical peers who varied on gender (i.e., boy vs. girl) and gender‐typed toy play behavior (i.e., masculine vs. feminine), and were asked to give a friendship preference rating for each peer. Chinese, compared with Thai, children evidenced gender‐related peer preferences that emerged earlier, remained more stable across age groups, and were relatively more biased against gender‐nonconforming behavior. The only cultural similarity was in children's preference for peers who were of the same gender and/or displayed same‐gender‐typed behavior. Thus, while preference for peers who are of the same gender and/or display same‐gender‐typed behavior is common among children across cultures, the developmental onset and course of these preferences vary by culture. Moreover, societal acceptance of gender nonconformity might be key to limiting children's bias against gender‐nonconforming peers. [ABSTRACT FROM AUTHOR]