This Social Policy Report considers the importance of young children's emotional development for their school readiness, suggesting that social scientists can provide policy makers with concrete ways to conceptualize, measure and target young children's emotional adjustment in early educational and child care settings. This Report then reviews a recent and persuasive body of rigorous research, to determine whether children's emotional adjustment can be significantly affected by interventions implemented in the preschool and early school years. Results of this review suggest that family, early educational, and clinical interventions offer policy makers a wide array of choices in ways that they can make sound investments in young children's emotional development and school readiness. This research suggests that, while young children's emotional and behavioral problems are costly to their chances of school success, these problems are identifiable early, are amenable to change, and can be reduced over time. What kinds of investments should policy makers be advised to make, at what point in young children's development, and in what settings? While modest investments in low-cost interventions initially may seem appealing, this report suggests that there are few bargains to be had when investing in young children's emotional adjustment. With this caveat in mind, the findings of this report suggest that policy makers should broaden early elementary educational mandates for school readiness to include children's emotional and behavioral adjustment as key programmatic goals. Policy makers should consider targeting young children's emotional adjustment prior to school entry, in diverse settings such as Head Start, child care settings, as well as in the first few years of school. [This issue of "Social Policy Report" also includes: "Emotion Knowledge and Emotion Utilization Facilitate School Readiness" (Carroll E. Izard) and "School Readiness and Regulatory Processes" (Claire B. Kopp).]