Fear of a stimulus can be learned vicariously by children observing others acting fearfully with it. However, for reasons not currently known, levels of fear learning differ greatly between individual children, with some children showing high levels of learning and others very little. Establishing the reasons for these differences is key to understanding processes moderating vicarious fear learning and individual differences in resilience and vulnerability to fear. The study investigated whether vicarious fear learning is influenced by levels of children’s (7- to 11-year-old) trait empathy and empathy appraisals during learning (‘state empathy’). Children’s trait empathy was measured and state empathy was manipulated across three groups (high empathy, low empathy and control). Fear beliefs and avoidance preferences were measured before and after vicarious learning. Results found that levels of vicarious fear learning were associated with children’s trait and state empathy. Specifically, observationally learned avoidance correlated with trait empathy across all groups. Fear beliefs only correlated with trait empathy for children in the high state empathy group; that is only for children who had been instructed to make emotional appraisals during learning. Thus differences in the development of empathy and attention to others’ emotions may explain individual differences in the vicarious learning of fear in children.