Three decades of research have examined children's challenge and threat appraisals, yet unresolved issues remain. This study provides new insight about three central, open questions in this field: How do challenge and threat appraisals relate to events eliciting discrete negative emotions? How do challenge appraisals develop across childhood, and are there gender differences across development? In this cross-sectional study, 172 children (three age groups: 3-5 years, 6-8 years, and 9-11 years) and 89 young adults (ages 17-26) described sad, scary, and anger-provoking autobiographical experiences and were asked whether the event was something they could handle (a challenge appraisal) or whether it was just too much (a threat appraisal). Challenge appraisals were associated with anger-eliciting events more often than with sad or scary events. In line with predictions, challenge appraisals steadily increased across age groups. In early childhood, girls made more challenge appraisals than boys, but young adult men made more challenge appraisals than young adult women. Findings highlight the importance of understanding the developmental progression of appraising difficult events and experiences as a challenge rather than a threat, and provide new information about the etiology of adaptive appraisal processes in early life.