To explore how parental socialization of emotion may influence children's emotion understanding, which then guides children's interpretations of emotion‐related situations across contexts, we examined the pathways between socialization of emotion and children's adjustment in the classroom, with children's emotion understanding as an intervening variable. Specifically, children's emotion understanding was examined as a mediator of associations between mothers' beliefs about the value and danger of children's emotions and children's adjustment in the classroom within an SEM framework. Classroom adjustment was estimated as a latent variable and included social, emotional, and behavioral indices. Covariates included maternal education, and child gender and ethnicity. Participants were a diverse group of 201 third‐graders (116 African American, 81 European American, 4 Biracial; 48.8% female), their mothers, and teachers. Results revealed that emotion‐related beliefs (value and danger) had no direct influence on classroom adjustment. However, children whose mothers endorsed the belief that emotions are dangerous demonstrated less emotion understanding and were less well‐adjusted in the classroom. Mothers' belief that emotions are valuable was not independently associated with emotion understanding. Findings point to the important role of emotion understanding in children's development across contexts (family, classroom) and developmental domains (social, emotional, behavioral) during the middle childhood years.