Intact emotion processing is critical for normal emotional development. Recent advances in neuroimaging have facilitated the examination of brain development, and have allowed for the exploration of the relationships between the development of emotion processing abilities, and that of associated neural systems. A literature review was performed of published studies examining the development of emotion expression recognition in normal children and psychiatric populations, and of the development of neural systems important for emotion processing. Few studies have explored the development of emotion expression recognition throughout childhood and adolescence. Behavioural studies suggest continued development throughout childhood and adolescence (reflected by accuracy scores and speed of processing), which varies according to the category of emotion displayed. Factors such as sex, socio-economic status, and verbal ability may also affect this development. Functional neuroimaging studies in adults highlight the role of the amygdala in emotion processing. Results of the few neuroimaging studies in children have focused on the role of the amygdala in the recognition of fearful expressions. Although results are inconsistent, they provide evidence throughout childhood and adolescence for the continued development of and sex differences in amygdalar function in response to fearful expressions. Studies exploring emotion expression recognition in psychiatric populations of children and adolescents suggest deficits that are specific to the type of disorder and to the emotion displayed. Results from behavioural and neuroimaging studies indicate continued development of emotion expression recognition and neural regions important for this process throughout childhood and adolescence. Methodological inconsistencies and disparate findings make any conclusion difficult, however. Further studies are required examining the relationship between the development of emotion expression recognition and that of underlying neural systems, in particular subcortical and prefrontal cortical structures. These will inform understanding of the neural bases of normal and abnormal emotional development, and aid the development of earlier interventions for children and adolescents with psychiatric disorders.