The article is a review of development of children's knowledge of causes and consequences of other people's emotions, of how children explain emotional reactions of other people, and how such explanations modify in different childhood stages. As a result, we describe 4 different childhood stages characterized by types of explanations of emotional reactions. Children explain emotions in a specifc manner and make typical mistakes in such explanations. In the frst stage (about 2 years old), emotional reactions are viewed as objective in the sense that situations affect everyone's emotions similarly (e.g., birthdays make you happy, a burial makes you sad). At the end of the second year, this explanation changes to another one, in which emotions depend on the actor's explicit desires. From 3 to 5 years old, most children rely on beliefs instead of desires to explain emotional reactions in the same situations. At last, from 6 years old, children are capable of taking into account differences between people's points of view in the same situations, which explains differences in their emotional reactions.