Emotion regulation--as a vital part of children's development, school readiness, and academic success--begins to develop in infancy and toddler time. Much of the research on toddler emotion regulation are correlational studies in laboratory settings. Little attention has been directed to toddlers' emotion regulation in everyday naturalistic contexts. Drawing upon Vygotsky's cultural-historical approach, the current case study sought to examine how everyday parent-toddler interactions assist the toddler's emotion regulation in emotionally charged situations in a Chinese-American family home. Findings showed that the strategy of interactive imagination supported the toddler's emotion regulation in emotionally charged situations. However, parents did not often apply this method. It is argued that interactive imagination is an essential tool to be used in everyday parent-toddler interactions for emotion regulation. Recommendations for practice are discussed.