In many ways this chapter forms the core of our thinking about the role of affects in self-development—a theoretical and conceptual problem that we tackle more fully in chapter 5. We start this chapter by placing the construct of emotions within the framework of the development of intentionality and mentalization, the concepts that lie at the core of our theoretical and clinical work. We then focus on the nature of the developmental processes involved in the emergence of understanding of emotions in self and other. The development of emotions during the first year of life is outlined and placed in the context of one of the organizing concepts of this book: the infant's sensitivity to contingencies between his actions and their perceived environmental effects. We describe the social biofeedback theory of emotional development, which we see as the key to understanding the link between early experience and later vulnerability to psychosocial stress. We also point briefly to a number of pathological modes of early infant-caregiver interaction that could give rise to later psychological disturbance and the vulnerability of the self as agent. Chapter 5 then attempts to integrate the particular view of emotional development described in this chapter within our more general theoretical approach to the early development of self and agency.