Two studies were conducted in which we examined the relation between shyness and facial expression processing in children. In Study 1, facial expression recognition was examined by asking 97 children ages 12 to 14 years to identify six different expressions displayed at 50% and 100% intensity, as well as a neutral expression. In Study 2, the focus shifted from the recognition of emotions to the interpretation of emotions. In this study, 123 children aged 12 to 14 years were asked a series of questions regarding how they would perceive different facial expressions. Findings from Study 1 showed that, in the case of shy boys, higher levels of shyness were related to lower recognition accuracy for sad faces displayed at 50% intensity. However, in most cases, shyness was not related to facial expression recognition. The results from Study 2 suggested broader implications for shy children. The findings of Study 2 demonstrated that shyness is predictive of biased facial expression interpretation and that rejection sensitivity mediates this relation. Overall the results of these two studies add to the research on facial expression processing in shy children and suggest that cognitive biases in the way facial expressions are interpreted may be related to shy children’s discomfort in social situations.