Emotion understanding develops rapidly in early childhood. Firstborn children (N = 231, 55% girls/45% boys, 86% White, 5% Black, 3% Asian, 4% Latinx, Mage = 29.92 months) were recruited into a longitudinal study from 2004 to 2008 in the United States and administered a series of tasks assessing eight components of young children's emotion understanding from ages 1 to 5. Cohort sequential analysis across three cohorts (1-, 2-, and 3-year-olds) demonstrated a progression of children's emotion understanding from basic emotion identification to an understanding of false-belief emotions, even after controlling for children's verbal ability. Emotion understanding scores were related to children's theory of mind and parent reports of empathy, but not emotional reactivity, providing evidence of both convergent and discriminant validity.