Family narratives about the past are an important context for the socialization of emotion, but relations between expression of negative emotion and children's emerging competence are conflicting. In this study, 24 middle-class two-parent families narrated a shared negative experience together and we examined the process (initiations and collaborations) and function (the expression and explanation of emotions) of co-constructed narratives in relation to preadolescents' perceived competencies and self-esteem. Family narratives in which specific emotions were expressed and explained in a collaborative fashion, especially negative emotion, were positively related to preadolescents' reported competencies and self-esteem, whereas family narratives that expressed general positive emotion were negatively related to preadolescents' perceived competencies. Implications of family narratives about emotional events, specifically the ways in which families discuss emotion, in relation to preadolescents' self-development are discussed.