Children who are able to recognize others' emotions are successful in a variety of socioemotional domains, yet we know little about how school‐aged children's abilities develop, particularly in the family context. We hypothesized that children develop emotion recognition skill as a function of parents' own emotion‐related beliefs, behaviours, and skills. We examined parents' beliefs about the value of emotion and guidance of children's emotion, parents' emotion labelling and teaching behaviours, and parents' skill in recognizing children's emotions in relation to their school‐aged children's emotion recognition skills. Sixty‐nine parent–child dyads completed questionnaires, participated in dyadic laboratory tasks, and identified their own emotions and emotions felt by the other participant from videotaped segments. Regression analyses indicate that parents' beliefs, behaviours, and skills together account for 37% of the variance in child emotion recognition ability, even after controlling for parent and child expressive clarity. The findings suggest the importance of the family milieu in the development of children's emotion recognition skill in middle childhood and add to accumulating evidence suggesting important age‐related shifts in the relation between parental emotion socialization and child emotional development. Copyright © 2014 John Wiley & Sons, Ltd.