This study examined how induction of positive or negative affect influences children’s performance on two types of emotion recognition tasks that utilized different levels of cognitive complexity: context-based and label-based tasks. Eighty-seven 5- to 8-year-olds viewed photos of adults’ facial expressions presented on a computer monitor and identified their emotional expressions. Children were most accurate in responding to label-based questions and had faster response times as compared to the context-based questions. Contextual cues, however, facilitated children’s ability to infer negative emotions more so than positive emotions. In addition, children in the positive mood induction condition completed the label-based and context-based questions significantly faster than children in the neutral or negative mood induction condition, but positive mood did not significantly influence children’s accuracy of response. Results from the present study may help to expand existing social information processing models by incorporating the influence cognitive complexity and affect may serve in children’s recognition of others’ emotions.