The authors aimed to examine the possible association between (a) accurately reading emotion in facial expressions and (b) social and academic competence among elementary school-aged children. Participants were 840 7-year-old children who completed a test of the ability to read emotion in facial expressions. Teachers rated children's social and academic behavior using behavioral rating scales. The authors found that children who had more difficulty identifying emotion in faces also were more likely to have more problems overall and, more specifically, with peer relationships among boys and with learning difficulties among girls. Findings suggest that nonverbal receptive skill plays a significant role in children's social and academic adjustment.