Sleep and emotion are closely linked, however the effects of sleep on socio-emotional task performance have only recently been investigated. Sleep loss and insomnia have been found to affect emotional reactivity and social functioning, although results, taken together, are somewhat contradictory. Here we review this advancing literature, aiming to 1) systematically review the relevant literature on sleep and socio-emotional functioning, with reference to the extant literature on emotion and social interactions, 2) summarize results and outline ways in which emotion, social interactions, and sleep may interact, and 3) suggest key limitations and future directions for this field. From the reviewed literature, sleep deprivation is associated with diminished emotional expressivity and impaired emotion recognition, and this has particular relevance for social interactions. Sleep deprivation also increases emotional reactivity; results which are most apparent with neuro-imaging studies investigating amygdala activity and its prefrontal regulation. Evidence of emotional dysregulation in insomnia and poor sleep has also been reported. In general, limitations of this literature include how performance measures are linked to self-reports, and how results are linked to socio-emotional functioning. We conclude by suggesting some possible future directions for this field.