The current study examined the characteristics of physiological synchrony between grandmothers and grandchildren in Chinese three-generation families, and the associations between physiological synchrony and child emotion regulation. The participants included 92 children (age 8–10-year old) and their grandmothers. Respiratory sinus arrhythmia (RSA) was collected from both grandmothers and their grandchildren throughout a collaborative drawing task and a conflict discussion task. Child emotion regulation was measured using the Children's Emotional Management Scale. We found no evidence for an overall pattern of concordant or discordant synchrony within dyads. Instead, there was great variability in patterns of synchrony across dyads. During the collaborative drawing task, concordance in grandmother's RSA and grandchildren's subsequent RSA was linked with better emotion regulation. During the conflict discussion, concordance in grandmother's RSA and grandchildren's simultaneous RSA was linked with poorer emotion regulation. These results suggest that grandmother–grandchild synchrony in different directions, time lags, and contexts has different influences on children's emotion regulation. The findings of this study highlight the importance of contextual physiological co-regulation between Chinese children and their grandmothers for children's social-emotional development.