Although irritability and sadness are cardinal symptoms of depression, they are also common in preschoolers. The daily experiences of these emotions are not well-understood during early childhood, yet may provide insight into identification of early depressive symptoms. The current longitudinal study examined daily mean levels and emotion dynamics of preschool-aged children’s irritability and sadness and psychiatric outcomes in early school-age. Parents (n = 291) completed 14 consecutive daily diaries about their preschoolers’ emotions. Two years later, parents (n = 164) completed a semi-structured clinical interview and questionnaires about their children’s psychological functioning. Strong correlations between mean and dynamic measures (rs = 0.65–0.91) were identified. Preschoolers’ mean daily levels and dynamics of irritability (variability, instability, inertia) and sadness (instability, inertia) predicted symptoms and impairment 2 years later. Sadness instability and inertia continued to predict difficulties after adjusting for mean daily sadness. Fine-grained daily measures of preschoolers’ affect may be help identify children at-risk for psychological problems.