The present study examined the relationship between parent-child interaction and children's emotion understanding ability. The participants were 56 three-year-old children and their mothers from Beijing, China. Mothers and children took part in three dyadic interaction tasks and were video recorded for coding of both mothers’ and children's behaviours. Each child completed three individually administered tests of emotion understanding, including the facial expression recognition task, emotion perspective-taking task, and emotion reason understanding task. Results demonstrated that both mothers’ and children's interaction behaviours were related to children's emotion understanding. Gender differences were found in the relationships between interaction behaviours and children's emotion understanding. Girls’ emotion understanding was associated with children's positive behaviours. In contrast, boys’ emotion understanding was not associated with children's positive behaviours, but related to mothers’ negative behaviours.