This study examined parent-child emotion discourse, children's independent social information processing, and social skills outcomes in 146 families of 8-year-olds with and without developmental delays. Children's emergent social-cognitive understanding (internal state understanding, perspective taking, and causal reasoning and problem solving) was coded in the context of parent-child conversations about emotion, and children were interviewed separately to assess social problem solving. Mothers, fathers, and teachers reported on children's social skills. The proposed strengths-based model partially accounted for social skills differences between typically developing children and children with delays. A multigroup analysis of the model linking emotion discourse to social skills through children's prosocial problem solving suggested that processes operated similarly for the two groups. Implications for ecologically focused prevention and intervention are discussed.