Background Childhood anxiety is associated with low levels of parental autonomy granting and child perceived control, elevated child emotional reactivity and deficits in child emotion regulation. In early childhood, low levels of parental autonomy granting are thought to decrease child perceived control, which in turn leads to increases in child negative emotion. Later in development, perceived control may become a more stable, trait‐like characteristic that amplifies the relationship between parental autonomy granting and child negative emotion. The purpose of this study was to test mediation and moderation models linking parental autonomy granting and child perceived control with child emotional reactivity and emotion regulation in anxious youth. Methods Clinically anxious youth (N = 106) and their primary caregivers were assessed prior to beginning treatment. Children were administered a structured diagnostic interview and participated in a parent–child interaction task that was behaviorally coded for parental autonomy granting. Children completed an ecological momentary assessment protocol during which they reported on perceived control, emotional reactivity (anxiety and physiological arousal) and emotion regulation strategy use in response to daily negative life events. Results The relationship between parental autonomy granting and both child emotional reactivity and emotion regulation strategy use was moderated by child perceived control: the highest levels of self‐reported physiological responding and the lowest levels of acceptance in response to negative events occurred in children low in perceived control with parents high in autonomy granting. Evidence for a mediational model was not found. In addition, child perceived control over negative life events was related to less anxious reactivity and greater use of both problem solving and cognitive restructuring as emotion regulation strategies. Conclusion Both parental autonomy granting and child perceived control play important roles in the everyday emotional experience of clinically anxious children.