The critical role of the second year of life in the development of empathy is well accepted by psychologists. However, the developmental trends of the different components of empathy and the potential factors underlying these components during this critical period remain unclear. Eighty‐four Chinese toddlers in the second year of life participated in the present study. Empathy‐related responses were observed during three simulated procedures performed by each child's primary caregiver, the experimenter and a baby doll. An exploratory factor analysis was used to identify the different components of empathy. The shared representation of the self and others was measured using the Tasks for the Observation of Self‐Concept, self/other awareness was measured with a series of mirror tests and inhibitory control was measured using the Cylinder Inhibitory Control Task. The results showed that the empathy of Chinese toddlers contains three factors: sympathy, personal distress and orientation. Potential cognitive factors contribute to the different components of empathy through both independent and joint effects. © 2016 The Authors Infant and Child Development Published by John Wiley & Sons, Ltd.