The power of human social cognition is typically associated with mental state reasoning—a mentalistic stance. Here, we argue humans have a second equally powerful system, an institutional stance, that interprets social interactions in terms of structured sets of roles linked to rule-like behavioral expectations. Precursors of the institutional stance in other species may support social reasoning in the absence of complex models of mental states. However, the institutional stance is unique in humans in its generative capacity, supporting the creation of a myriad range of institutional structures that shape our world and enable large-scale social coordination.