Guided by the conceptual frameworks of social withdrawal (Rubin, K. H., & Chronis-Tuscano, A. (2021). Perspectives on social withdrawal in childhood: Past, present, and prospects. Child Development Perspectives, 15(3), 160-167.) and emotion socialization (Eisenberg, N., Cumberland, A., & Spinrad, T. L. (1998). Parental socialization of emotion. Psychological Inquiry, 9, 241-273.; Morris, (A) S., Criss, M. M., Silk, J. S., & Houltberg, (B) J. (2017). The impact of parenting on emotion regulation during childhood and adolescence. Child Development Perspectives, 11(4), 233-238.), the current study examined multifaceted relations among temperamental shyness, peer competence, and loneliness and focused on the role of socializing and expressing positive emotion in middle childhood. Participants included 1,364 families, among whom mothers reported children's temperament when children were 4.5 years old. Mothers and alternative caregivers (usually fathers) independently rated family expressiveness when children were 8-9 years old. Mothers rated their children's peer competence, and children's positive affect with peers were observed when children were ages 8-9 and 10-11. Children self-rated their loneliness levels at ages 10-11. A path model revealed a moderated mediation effect, such that family positive expressiveness moderated the sequential mediation pathway from child temperamental shyness through child peer competence at ages 8-9 and positive affect with peers at ages 10-11 to loneliness at ages 10-11. This sequential mediation was significant only under low but not high levels of family positive expressiveness. Findings support the importance of socializing positive emotion in the context of temperamental shyness and have implications for family-based intervention strategies aimed at children exhibiting high temperamental shyness.