Emotional understanding facilitates successful social competence because children rely upon knowledge of emotional states to detect peers' intentions and respond appropriately. High quality relationships between parents and children support the successful development of emotional understanding, while exposure to negative affect in the home has been associated with decreased skill in emotional understanding. Using a high-risk sample of 60 mothers and children with substantial diversity in relationship quality and maternal negative affect, the goal of the current research is to determine how early emotional and relationship experiences contribute to later emotional understanding. First, using a longitudinal design, this investigation will assess the importance of early parent-child relationships in promoting preschoolers' emotional understanding. Second, this investigation will address the role of maternal negative affect in later emotional understanding, with emphasis on the potential moderating effect of early relationships. Third, this investigation will examine the role of emotional understanding in promoting social competence among children who are at risk for adverse emotional and social outcomes, thus expanding current knowledge regarding the relation between emotional understanding and social competence in diverse samples.