In multicultural education, empathy has been regarded as an essential teacher disposition that enables teachers to better understand culturally and linguistically diverse (CLD) students through perspective-taking. However, less is known about the mechanism that underlies how empathy fosters teachers’ competence in supporting CLD students, i.e., their multicultural teaching competence. This study fills the research gap by investigating multicultural beliefs as a potential mediator between teacher empathy (operationalized via perspective-taking) and multicultural teaching competence (as indicated by knowledge, skills, and relationship-building abilities). A total of 445 Chinese preschool and kindergarten teachers in Hong Kong (188 pre-service and 257 in-service teachers) completed a self-report questionnaire assessing teacher empathy, multicultural beliefs, and multicultural teaching competence. Mediation analyses revealed that teacher empathy was related to higher support for multicultural beliefs, which in turn predicted better multicultural skills, knowledge, and relationship-building abilities. The multi-group analysis further indicated equivalent mediation paths for both pre-and in-service teachers. Extending past research underscoring empathy as an essential teacher disposition for multicultural teaching competence, the present study showed that the crucial role of empathy in transforming teachers’ belief in favor of multiculturalism helps foster teachers’ multicultural teaching competence. A practical implication of the present study calls for including perspective-taking and critical examination of teacher beliefs as key elements in teacher education programs that are aimed at facilitating early childhood teachers’ multicultural teaching competence. Copyright © 2024 The Author(s), under exclusive licence to Springer Nature B.V.