Background: Socially anxious children tend to attach great importance to others' evaluations of them. However, the extent to which they base their momentary feelings of self-worth (i.e., state self-esteem) on social (dis)approval is unclear. It is also unclear whether this exceedingly approval-based self-esteem is a common correlate of social anxiety and depression, or specifically linked to one or the other. Methods: Changes in children's state self-esteem were obtained in response to a manipulated peer evaluation outcome. Participants (N = 188) aged 10 to 13 took part in a rigged online computer contest and were randomized to receive positive or negative peer feedback. Self-reported state self-esteem was assessed via computer at baseline and immediately post-feedback. The predictive effects of self-reported social anxiety and depression symptoms on changes in state self-esteem were investigated. Results: Hierarchical multiple regression analyses showed that children with higher social anxiety, as indexed by the fear of negative evaluation component, experienced significantly stronger increases in state self-esteem following peer approval (β =.26, p <.05), and significantly stronger decreases in state self-esteem following peer disapproval (β =-.23, p <.05). In both conditions depressive symptoms did not predict changes in state self-esteem (ps >.20). Conclusions: Socially anxious children's state self-esteem is strongly contingent on social approval. Because basing one's self-esteem on external validation has multiple negative consequences, these findings highlight the importance of teaching these children skills (e.g., making cognitive reappraisals) to weaken the linkage between other- and self-evaluations. © 2010 The Authors. Journal of Child Psychology and Psychiatry © 2010 Association for Child and Adolescent Mental Health.