OBJECTIVE: The authors examined facial expression recognition in adolescents with mood and anxiety disorders. METHOD: Standard facial emotion identification tests were given to youth with bipolar disorder (N=11) or DSM-IV anxiety disorders (N=10) and a group of healthy comparison subjects (N=25). RESULTS: Relative to the anxiety disorder and healthy comparison groups, the subjects with bipolar disorder made more emotion recognition errors when presented with faces of children. Unlike the anxious and comparison subjects, bipolar disorder youth were prone to misidentify faces as angry. No differences in emotion recognition errors were seen when the adolescents were presented with adult faces. CONCLUSIONS: A bias to misinterpret the facial expressions of peers as angry may characterize youth with bipolar disorder but not youth with anxiety disorders. This bias may relate to social impairment in youth with bipolar disorder.