Multiple sclerosis (MS) is a white matter disease associated with neurocognitive difficulties. More recently the potential for white matter pathology to also disrupt important aspects of emotion understanding has been recognized. However, no study to date has assessed whether capacity for facial affect recognition and theory of mind (ToM) is disrupted in MS, or whether any observed deficits are related to more general cognitive impairment. In the present study MS participants (n = 27) and nonclinical controls (n = 30) were administered measures of facial affect recognition, ToM, and cognitive functioning. MS participants were significantly impaired on the ToM task, and also presented with specific deficits decoding facial emotions of anger and fear. Performance on the measures of facial affect recognition and ToM were related to general cognitive functioning, and in particular, measures sensitive to executive dysfunction and information processing speed. These data highlight the need for future research to more fully delineate the extent and implications of emotion understanding difficulties in this population.