Borderline personality disorder (BPD) is characterized by distinct impairments in emotion regulation, resulting in affective instability especially in the social context. It has been suggested that impaired social cognitive functioning such as impaired facial emotion recognition contributes to the social disturbances in BPD. In accordance with this notion, a number of behavioral studies have revealed a pattern of alterations in facial emotion recognition associated with BPD: subtle impairments in basic emotion recognition, a negativity or anger bias, and a heightened sensitivity to the detection of negative emotions. Furthermore, there is increasing evidence for structural and functional changes in the neural networks underlying affective dysregulation and emotional hyperreactivity in BPD. Merging these lines of evidence, we propose that emotional hyperreactivity interferes with the cognitive processes of facial emotion recognition, thereby contributing to the specific pattern of altered emotion recognition in BPD. Suggestions for future research and clinical implications are discussed.