This chapter introduces the notion of interactional competence, which relates to speakers’ systematic procedures (or methods) for co-constructing recognizable social actions and managing interaction organization through various interactional practices and semiotic resources. After outlining the conceptual roots of the notion in ethnomethodology and conversation analysis (CA), the chapter discusses conversation analytic research on how speakers of a first and a second language develop their interactional competence over time, focusing both on the development of interactional practices for action accomplishment and the development of related linguistic (and bodily-visual) resources. The cumulative evidence from existing research points to a developmental trajectory that consists of speakers’ diversifying their practices and resources for action over time, enabling them to deploy increasingly recipient-designed and context-sensitive conduct. The chapter also identifies the impact CA work on interactional competence development has had within and outside of CA, contributing to the emergence of longitudinal CA and holding implications for (second) language testing and teaching. Based on empirical evidence, the chapter identifies avenues for future research, highlighting the need for more attention to the catalysts of interactional competence development and a more diverse empirical basis in terms of participant groups, interactional settings, and languages investigated.