The second year of life sees dramatic developments in infants' ability to understand emotions in adults alongside their growing interest in peers. In this study, the authors used a social-referencing paradigm to examine whether 12-, 18-, and 24-month-old children could use a peer's positive or negative emotion messages about toys to regulate their own behavior with the toys. They found that 12-month-olds decreased their play with toys toward which a peer had expressed either positive or negative emotion compared with play following a peer's neutral attention toward a toy. Also, 18-month-olds did not respond systematically, but 24-month-old children increased their toy play after watching a peer display negative affect toward the toy. Regardless of their age, children with siblings decreased their play with toys toward which they had seen a peer display fear, the typical social-referencing response. The authors discuss results in the context of developmental changes in social understanding and peer interaction over the second year of life. (Contains 1 table and 3 figures.)