Although theoretical work proposes that emotion regulation development exhibits a positive growth trajectory across adolescence as prefrontal brain regions continue to mature, individual differences in developmental changes of emotion regulation merit elucidation. The present study investigates longitudinal links between the family environment (i.e., socioeconomic risk and family emotional context) and emotion regulation development. The sample included 167 adolescents (53% males) who were first recruited at 13–14 years of age and assessed annually four times. Latent change score analyses identified family emotional context as a mediator between socioeconomic risk and emotion regulation development, such that lower socioeconomic risk (higher socioeconomic status and lower household chaos) at Time 1 was associated with a more positive family emotional context (parent emotion regulation, parenting practices, and parent–adolescent relationship quality), which in turn was associated with larger year-to-year increases in emotion regulation. The findings highlight the important role of the family emotional context as a process explaining how the challenges of growing up in a household laden with socioeconomic risk may be associated with emotion regulation development during adolescence.