Emotion recognition deficit is related to impaired community functioning. Loneliness is also associated with impaired social performance. However, the way in which emotion recognition and loneliness may contribute to social functioning remains unclear in euthymic patients with bipolar disorder. We aimed to examine emotion recognition ability in Han Chinese euBD patients relative to healthy controls (HCs) and to investigate the associations between emotion recognition, loneliness, and social functioning. Thirty-nine HCs and 46 euthymic BD patients completed an emotion recognition task and nonsocial cognitive measures related to executive function and attention. The UCLA loneliness scale and Social Performance Scale were administered to evaluate psychological loneliness and social functioning, respectively. We observed lower emotion recognition accuracy, higher loneliness, and poorer social functioning in the BD patients after adjustment for demographic data. Loneliness was negatively associated with global social functioning in both the BD and HC groups. Higher loneliness and lower emotion recognition accuracy were associated with poorer social functioning in euthymic BD in different subdomains. Our study confirmed a subtle impairment of emotion recognition ability in euthymic BD. Loneliness impacts globally on social functioning, while emotion recognition ability may affect specific subdomains of social functioning in euthymic BD. Alleviation of loneliness and enhancement of social cognition might improve social functioning in BD patients.