The preschool years are a critical period for children's cognitive and socio-emotional development. Not only do many skills developed during the preschool years positively predict current and future academic, social, and emotional competence (Denham et al., 2003; Eisenberg, Smith, Sadovsky & Spinrad., 2004; Whitehurst & Lonigan, 1998); any disruptions to cognitive and socio-emotional functioning are likely to have a significant negative effect on functioning through the primary years and beyond (Cicchetti & Lynch, 1995; Izard et al., 2001). A key influence in the development of many cognitive and socio-emotional skills is the way in which children interact verbally with others. Although these conversational partners may include teachers, siblings and peers, during the preschool years it is parents - and in particular, mothers - who are most frequently implicated. Both the style and content of conversations between mothers and their young children has been found to have far-reaching effects on the children's development. For example, mothers who frequently elaborate on their child's conversational contributions have children who come to independently recall more of their past and present experiences (Boland, Haden & Ornstein, 2003; Fivush, Haden & Reese, 2006; Hudson, 1993), and, according to our own correlational and experimental research, who also display a better understanding of emotions. Discussing the emotional aspects of an event, which may serve to provide meaning and structure, also benefits both memory and emotion competence: When reminiscing with a researcher about a staged 'visit to the zoo' event, for example, we found that children who reminisced about animals' emotions (e.g. causes; expressions) recalled significantly more of the event overall than did children who reminisced about nonemotional aspects of the event. Past research also shows associations between mothers' emotion references, children's emotion knowledge, and children's social competence (e.g. Denham, 1998; Martin & Green, 2005). In this chapter we review the many ways in which preschoolers' verbal interactions with others facilitate both cognitive and socio-emotional functioning. We next discuss the development of autobiographical memory and emotion knowledge, including our own more specific research program in which we investigate the influence of emotion talk on autobiographical memory and the effects of a maternal reminiscing training program on children's emotion knowledge. Finally we outline future research that may further clarify the influence different kinds of verbal interaction have on children's development.