Transgender and gender diverse (TGD) youth face unique challenges throughout development, leading to greater risk for developing psychopathology. There is a paucity of research examining factors that may protect against or increase risk for the development of psychopathology in TGD youth. Emotion regulation is important in the development of has been shown to protect against psychopathology, while emotion regulation difficulties are linked to psychopathology. In addition, discrimination impacts emotion regulation, possibly mediating the pathway between minority stress and psychopathology. This review integrates current developmental literature on emotion regulation alongside factors unique to TGD youth. Building on minority stress theory, we examine factors at the individual, interpersonal, and societal levels and discuss future research directions.