The present study examines how emotion affects false memory formation using the Backwards Causal-Inference Paradigm, with a developmental perspective. One-hundred-and-thirty-two children participated in the study, with 56 children aged 6-8 years, 43 children aged 9-10 years and 33 children aged 11-12 years. The children were presented with one of six different PowerPoints, which all displayed the same scripts in photographs, but differed in emotional (positive vs. negative vs. neutral) outcome of the script. After a retention interval, the children were presented with 30 photographs previously displayed, and 30 photographs that were new. The children then expressed which of the pictures they had seen or not with a simple yes or no response. Children aged 9-10 were significantly better at discriminating between old and new pictures compared to children aged 6-8. The children aged 11-12 were not significantly different from the other age groups. No significant developmental reversals were revealed. Regardless of age, the children made significantly fewer gap-filling errors than causal errors. There was a significantly lower rate of memory errors for positive stimuli than for both negative and neutral stimuli, and a significantly more liberal bias for positive and negative scripts than for neutral scripts when using the response criterion. No significant main effect of emotion was found using the discrimination accuracy index.