Understanding emotions based on false beliefs is a necessary component of theory of mind. Previous research has indicated a lag in children's understanding of belief-based emotions as compared to false beliefs. Experiment 1 involved 83 Chinese 3- to 5-year-old children who were tested for the developmental change of the belief-emotion lag. Experiment 1 identified a lag effect in 3- and 4-year-olds who had better performance at the false belief task than the belief-based emotion understanding task. To further examine the potential influence of material familiarity on the lag, 27 3-year-old children participated in Experiment 2. The results of Experiment 2 showed that 3-year-olds performed slightly better in the belief-based emotion understanding task when familiar materials were replaced by unfamiliar materials. A possible reason for the diminished level of the lag effect was discussed in light of children's emotional arousal. The findings have practical implications for implementing social and emotional learning programmes that foster young children's theory of mind understanding.