Moral emotions such as shame, guilt and pride are the result of an evaluation of the own behavior as (morally) right or wrong. The capacity to experience moral emotions is thought to be an important driving force behind socially appropriate behavior. The relationship between moral emotions and social behavior in young children has not been studied extensively in normally hearing (NH) children, let alone in those with a hearing impairment. This study compared young children with hearing impairments who have a cochlear implant (CI) to NH peers regarding the extent to which they display moral emotions, and how this relates to their social functioning and language skills. Responses of 184 NH children and 60 children with CI (14-61 months old) to shame-/guilt- and pride-inducing events were observed. Parents reported on their children's social competence and externalizing behavior, and experimenters observed children's cooperative behavior. To examine the role of communication in the development of moral emotions and social behavior, children's language skills were assessed. Results show that children with CI displayed moral emotions to a lesser degree than NH children. An association between moral emotions and social functioning was found in the NH group, but not in the CI group. General language skills were unrelated to moral emotions in the CI group, yet emotion vocabulary was related to social functioning in both groups of children. We conclude that facilitating emotion language skills has the potential to promote children's social functioning, and could contribute to a decrease in behavioral problems in children with CI specifically. Future studies should examine in greater detail which factors are associated with the development of moral emotions, particularly in children with CI. Some possible directions for future research are discussed.