Around the world, musical engagement frequently involves movement. Most adults easily clap or sway to a wide range of tempos, even without formal musical training. The link between movement and music emerges early--young infants move more rhythmically to music than speech, but do not reliably align their movements to the beat. Laboratory work encouraging specific motor patterns (e.g., drumming, tapping) demonstrates that toddlers and young children's movements are affected by music in a rudimentary way, such that they move faster to faster rhythms (tempo flexibility). In the present study, we developed and implemented a novel home recording method to investigate how musical familiarity and tempo affect children's naturalistic free-dance movements. Caregivers made home recordings of their children's responses to an experimenter-created playlist (N = 83, age range = 1.25 to 3.91 years, M[subscript age] = 2.39 years, SD = 0.74 years; 41 girls, 42 boys; 75% of household incomes > $90 000 CAD). Children listened to 1-min excerpts of their favorite music and unfamiliar, genre-matched music, each played at 90, 120, and 150 bpm (pitch constant; order randomized). Children moved faster to faster music and demonstrated tempo flexibility for both favorite and unfamiliar music. Favorite music encouraged more smiling across tempo conditions than unfamiliar music, as well as more dancing in the slowest tempo condition. Results demonstrate that young children's self-selected movements are affected by musical tempo and familiarity. We also demonstrate the usefulness of a naturalistic home recording method for assessing early auditory-motor integration.