Answers to the question "What are human emotions for?" have stimulated highly productive programs of research on emotional phenomena in psychology and neuroscience in the past decade. Although a variety of functions have been proposed and examined at different levels of abstraction, what is undeniable is that when emotional processing is compromised, most things social go awry. In this review we survey the research findings documenting the functions of emotion and link these to new discoveries about how emotion is accurately processed and transmitted. We focus specifically on emotion processing in dyads and groups, which reflects the current scientific trend. Within dyads, emotional expressions and learning and understanding through vicarious emotion are the phenomena of interest. Behavioral and brain mechanisms supporting their successful occurrence are evaluated. At the group level, group emotions and group-based emotions, two very different phenomena, are discussed, and mechanistic accounts are reviewed.