It is still largely unknown how receiving a cochlear implant affects the emotion understanding in deaf children. We examined indices for emotion understanding and their associations with communication skills in children aged 2.5-5 years, both hearing children (n = 52) and deaf children with a cochlear implant (n = 57). 2 aspects of emotion understanding were examined: (a) emotion recognition in facial expressions and (b) emotion attribution in a situational context. On all emotion-understanding tasks, children with a cochlear implant were less proficient than children with normal hearing. In children with normal hearing, performance and language skills were positively associated. In children with cochlear implants, language was positively associated only with tasks in which a verbal demand was made on children. These findings indicate that hearing loss in children, despite a cochlear implant, affects all aspects of emotion understanding measured in this study, including their nonverbal emotion-understanding skills.