Emotion lability and emotion regulation are critical processes that have been shown to have important contributions in the successful development of children. While these two emotion processes are intertwined, they have been distinctly associated with a diverse range of behavioural, academic, and social outcomes. Given the important implications of these emotional processes, it is essential to understand the factors that influence the development of emotion lability and emotion regulation. The present study aimed to contribute to the current research pertaining to parents’ role in the emotional development of children through examination of maternal and paternal psychological functioning and emotion regulation as potential predictors of child emotion lability and emotion regulation. Participants included ninety-three preschool children and their parent(s). Parents completed self-report measures regarding their own emotion regulation and psychological functioning, as well as their child’s emotion regulation and emotion lability. Correlational analyses revealed that although, in general, maternal and paternal emotion regulation and psychological functioning were not significantly associated with child emotion regulation, significant associations were evident in the relationship between numerous parent variables and children’s emotion lability. Interestingly, both parent and child gender differences were evident in these relationships. Multiple regression analyses indicated that mothers’ overall emotional well-being predicted children’s emotion lability for both boys and girls, however, these same models were not significant for fathers’ emotional well-being. The importance of emotion lability as it relates to fostering positive emotional development in early childhood is highlighted, and implications for future research on emotion regulation is discussed.