Objective: This study aimed to examine the mediating effects of internalized shame and rejection sensitivity in the relationship between covert narcissism and displaced aggression in late childhood. Methods: The participants included 1,060 children (grades 5 and 6; 547 boys and 513 girls) from four elementary schools located in Seoul, Gyeonggi-do, and Chungcheong-do. Results: The primary results of this study were as follows. First, child covert narcissism had a direct effect on displaced aggression; children who perceived higher levels of covert narcissism exhibited more displaced aggression. Second, child covert narcissism had an indirect effect on their displaced aggression through internalized shame and rejection sensitivity. Children who perceived higher levels of covert narcissism reported more internalized shame and rejection sensitivity, which led to more displaced aggression. Conclusion: The findings of this research indicate that individual and interpersonal psychological factors need to be considered to explain displaced child aggression. Further, it is important that we help children to gain positive relationships with family and peers. It will help them break away their negative self or others representation, especially their internalized shame and rejection sensitivity.