BACKGROUND The capacity for emotion recognition and understanding is crucial for daily social functioning. We examined to what extent this capacity is impaired in young children with a Language Impairment (LI). In typical development, children learn to recognize emotions in faces and situations through social experiences and social learning. Children with LI have less access to these experiences and are therefore expected to fall behind their peers without LI. METHODS In this study, 89 preschool children with LI and 202 children without LI (mean age 3 years and 10 months in both groups) were tested on three indices for facial emotion recognition (discrimination, identification, and attribution in emotion evoking situations). Parents reported on their children's emotion vocabulary and ability to talk about their own emotions. RESULTS Preschoolers with and without LI performed similarly on the non-verbal task for emotion discrimination. Children with LI fell behind their peers without LI on both other tasks for emotion recognition that involved labelling the four basic emotions (happy, sad, angry, fear). The outcomes of these two tasks were also related to children's level of emotion language. CONCLUSIONS These outcomes emphasize the importance of 'emotion talk' at the youngest age possible for children with LI.