Background: Previous research highlights the significance of a functional polymorphism located in the promoter region (5-HTTLPR) of the serotonin transporter gene in emotional behaviour. This study examined the effect of the 5-HTTLPR polymorphism on emotion processing in a large number of healthy preschoolers. Methods: The 5-HTTLPR genotype was classified in 605 children as homozygous for the short allele (SS), homozygous for the long allele (LL), or heterozygous (LS). Emotion-processing was assessed using age-appropriate computer tasks where children matched happy, sad, angry, and fearful facial expressions preceded by a shape-matching task to assess basic matching ability. Results: We found that young children could differentiate between emotion categories (F = 12.1, p less than 0.001). The effect of 5-HTTLPR genotype depended on the emotion category presented (F = 2.3, p = 0.031). This effect was explained by the finding that SS children were less accurate at recognising fearful faces than LL or LS children (F = 5.3, p = 0.005). We did not find any significant differences as a result of 5-HTTLPR genotype for happy, sad or angry expressions (p greater than 0.05). Conclusions: Results indicate that 5-HTTLPR allele status selectively impacts the processing of fearful but not other facial expressions. This pattern is already apparent in very young typically developing children. Results may signal an early vulnerability for affective problems before disorders emerge.