The ability to perceive the emotional states of others, termed emotion recognition, allows individuals to adapt their conduct to the social environment. The brain mechanisms underlying this capacity, known to be impaired in individuals with autism spectrum disorder (ASD), remain, however, elusive. Using the emotional state preference paradigm, we show that adult mice can discern emotional states of conspecifics in a sex-specific manner, behavior impaired in an ASD mouse model. Fiber photometry revealed inhibition of pyramidal neurons in the prelimbic medial prefrontal cortex (PrL) during investigation of aroused individuals, as opposed to transient excitation towards non-aroused conspecifics. Augmenting this differential neuronal response enhanced emotion recognition, while abolishing this response eliminated such behavior, as demonstrated via optogenetic stimulation. Chronic electrophysiological recordings at the single-cell level indicated social stimulus-specific responses in PrL neurons at the onset and conclusion of social investigation bouts, potentially regulating the initiation and termination of social interactions. The dysregulated activity of these neurons may thus contribute to deficits in social behavior observed in ASD.