The aim of this study was to investigate the nonverbal decoding of emotion in a group of very preterm children and its relationship to social skills and problem behaviours. All children born less than 30 weeks gestation were prospectively enrolled in developmental follow-up. At 8 years of age, 112 children were assessed using the Receptive Faces subtest of the Diagnostic Analysis of Nonverbal Accuracy. Parents and teachers were asked to complete the Social Skills Rating System. In this very preterm group, 12.5% were rated by their parents as having a social skills impairment. Children were dichotomized by median split into below and above-average social skills groups. These groups differed significantly for social skill acquisition deficits, but not for the performance of already acquired skills. Children with below-average social skills showed significantly more errors in decoding emotional stimuli for both adult and child faces. Anger and low-intensity stimuli were particularly problematic. Ratings for behaviour problems were not related to decoding ability. Among social skills, assertion and responsibility were significantly related to decoding skills of child faces. The ability to decode facial emotion appears to be a factor in poorer social skills performance in very preterm children.