Music is a powerful medium to study emotion recognition. However, findings are mixed regarding the proficiency of young children to detect emotion conveyed by music. Moreover, we lack knowledge about music emotion recognition and callous-unemotional traits, which portend risk for externalizing problems. The current study examined the performance of 144 children aged 3-5 years old (47.9% female; 34.0% minoritized race/ethnicity) during a music recognition task, with clips conveying happiness, sadness, calmness, or fear. Children showed above-chance accuracy, particularly for high-arousal emotions (happiness, fear), with accuracy increasing from 3 to 5 years old. Children higher on callous-unemotional traits showed poorer emotion recognition, particularly for positively valenced music. Findings underscore the potential for music to promote emotion recognition and social competence skills across development.