The purpose of this study was to examine a new measure of children's dispositional positive empathy (i.e., reactions to others' positive emotions) and its concurrent and longitudinal relations with positive emotion, social competence, and empathy/sympathy with negative emotions. At Time 1, 192 3.5-year-olds (88 girls) participated; at Time 2, 1 year later, 168 4.5-year-olds (79 girls) participated. Children's positive empathy was reported by mothers and observed in the laboratory at Time 2. Additionally, mothers, fathers, and non-parental caregivers completed questionnaires at Time 1 and Time 2 regarding children's positive emotion, empathy/sympathy, and social competence. Children's positive emotion was observed at both assessments. There was evidence of reliability of the new reported measure of positive empathy. Additionally, there were numerous positive relations between positive empathy and social competence and between positive empathy and empathy/sympathy with negative emotions. This study provides unique insight into children's positive empathy and relations to socio-emotional functioning.