Sensitivity to others' emotions is foundational for many aspects of human life, yet computational models do not currently approach the sensitivity and specificity of human emotion knowledge. Perception of isolated physical expressions largely supplies ambiguous, low-dimensional, and noisy information about others' emotional states. By contrast, observers attribute specific granular emotions to another person based on inferences of how she interprets (or 'appraises') external events in relation to her other mental states (goals, beliefs, moral values, costs). These attributions share neural mechanisms with other reasoning about minds. Situating emotion concepts in a formal model of people's intuitive theories about other minds is necessary to effectively capture humans' fine-grained emotion understanding.