Over the last two decades, it has been established that children's emotion understanding changes as they develop. Recent studies have also begun to address individual differences in children's emotion understanding. The first goal of this study was to examine the development of these individual differences across a wide age range with a test assessing nine different components of emotion understanding. The second goal was to examine the relation between language ability and individual differences in emotion understanding. Eighty children ranging in age from 4 to 11 years were tested. Children displayed a clear improvement with age in both their emotion understanding and language ability. In each age group, there were clear individual differences in emotion understanding and language ability. Age and language ability together explained 72% of emotion understanding variance; 20% of this variance was explained by age alone and 27% by language ability alone. The results are discussed in terms of their theoretical and practical implications.