This study examined to what extent children and adults differ in how they process negative emotions during reading, and how they rate their own and protagonists’ emotional states. Results show that both children’s and adults’ processing of target sentences was facilitated when they described negative emotions. Processing of spill-over sentences was facilitated for adults but inhibited for children, suggesting children needed additional time to process protagonists’ emotional states and integrate them into coherent mental representations. Children and adults were similar in their valence and arousal ratings as they rated protagonists’ emotional states as more negative and more intense than their own emotional states. However, they differed in that children rated their own emotional states as relatively neutral, whereas adults’ ratings of their own emotional states more closely matched the negative emotional states of the protagonists. This suggests a possible difference between children and adults in the mechanism underlying emotional inferencing.