Understanding emotion in interpersonal contexts involves appreciating others’ relations with the environment. This ability is related fundamentally to social cognition, including understanding the actions and goals of social partners. However, the significance of infants’ emotion understanding has been largely underemphasized in recent studies on infants’ social-cognitive development. This dissertation presents the results of three experiments investigating the interconnectedness of emotion understanding and social cognition in socioemotional development. Study 1 investigated 12-month-old infants’ sensitivity to others’ emotional reactions to positive and negative events. The results provide the earliest evidence that infants expect others to respond with positive emotions to positive events and negative emotions to negative events. Study 2 examined 15- and 18-month-old infants’ use of an experimenter’s emotional communication to disambiguate and imitate her demonstrations of failed attempts to perform target actions on novel objects. Analyses of infants’ imitation of the target action indicated that 18-month-old infants, but not 15-month-olds, imitated more target actions when the experimenter expressed frustration after each failed attempt than when she expressed neutral affect. Study 3 sought to determine whether infants expect others to respond with emotions congruent with others’ perception of events, even if such perceptions are mistaken. The results, however, did not support these predictions. Infants did not appear to demonstrate any clear expectations regarding others’ belief-based emotional reactions to events. Taken together, the findings from these experiments advance our understanding of infant social cognitive and emotional development.