Shyness is characterized by the experience of heightened fear, anxiety, and social‐evaluative concerns in social situations and is associated with increased risk for social adjustment difficulties. Previous research suggests that shy children have difficulty regulating negative emotions, such as anger and disappointment, which contributes to problems interacting with others. However, it remains unclear precisely which strategies are involved among these associations. Accordingly, the goal of this study was to explore the mediating role of emotion regulation strategies in the links between young children’s shyness and social adjustment at preschool. Participants were 248 preschool children aged 2.5 to 5 years. Parents rated children’s shyness and emotion regulation strategies in the context of anger and fear. Early childhood educators assessed indices of social adjustment four months later. Among the results, active regulation mediated associations between shyness and subsequent prosocial and socially withdrawn behaviors. Child gender further moderated these linkages, such that the model predicting socially withdrawn behavior was stronger among boys. These results expand on our understanding of emotion regulation strategies in shy children’s early socio‐emotional development.