A vast body of literature shows that maternal depression has long-term adverse consequences for children. However, only very few studies have documented the effect of maternal depression on children's ability to process emotional expressions and even fewer incorporated measures of observed maternal sensitivity to further tease apart whether it is the symptoms per se or the associated impact via maternal sensitivity that affects children's developing emotion-processing abilities. In a large community sample of Dutch preschoolers (N = 770), we examined independent and mediated effects of maternal depressive symptoms and sensitivity on children's ability to recognize emotional expressions using a nonverbal and a verbal task paradigm. Maternal depressive symptoms predicted less accurate emotion labeling in children, while maternal sensitivity was associated with more accurate emotion matching, especially for sadness and anger. Maternal sensitivity did not mediate the observed associations between mothers’ depressive symptoms and children's emotion recognition, and effects were similar for boys and girls. Given that maternal depressive symptoms and sensitivity affected nonoverlapping areas of young children's emotion recognition, prevention and intervention efforts should focus on both alleviating maternal depressive symptoms and improving maternal sensitivity at the same time in order to maximize benefit.