Objective: To examine emotion processing in euthymic bipolar patients (EBP) compared to healthy controls. In addition, to determine whether or not there is an association between emotion processing and psychosocial functioning. Material and methods: A sample of 60 EBP and 60 healthy controls matched for age, gender, education level, and premorbid intelligence were studied. All subjects were assessed using the MATRICS Consensus Cognitive Battery (MCCB) and two additional executive function measures: the Trail Making Test-Part B and the Stroop Test. Emotion processing was examined using the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT). Psychosocial functioning was assessed using the Functional Assessment Short Test (FAST). Results: Euthymic bipolar patients obtained lower scores than controls in all MSCEIT measures except for the using emotions branch. Likewise, EBP obtained a worse performance than healthy controls in all neurocognitive domains. Correlation between MSCEIT strategic area measures and FAST total score was found (r = -0.311; P < 0.016). Regression analysis showed that residual depressive symptomatology explains a 9.1% of the variance in functional outcome. MSCEIT strategic area score explained an additional 8.6%. Neurocognition did not increase the percentage of the variance explained by emotion processing. Conclusions: Euthymic bipolar patients exhibit deficits in emotion processing. Emotion processing is associated with social functioning in these patients.