The aim of this paper is to propose a systematic classification of emotions which can also characterize their nature. The first challenge we address is the submission of clear criteria for a theory of emotions that determine which mental phenomena are emotions and which are not. We suggest that emotions as a subclass of mental states are determined by their functional roles. The second and main challenge is the presentation of a classification and theory of emotions that can account for all existing varieties. We argue that we must classify emotions according to four developmental stages: 1. pre-emotions as unfocussed expressive emotion states, 2. basic emotions, 3. primary cognitive emotions, and 4. secondary cognitive emotions. We suggest four types of basic emotions (fear, anger, joy and sadness) which are systematically differentiated into a diversity of more complex emotions during emotional development. The classification distinguishes between basic and non-basic emotions and our multi-factorial account considers cognitive, experiential, physiological and behavioral parameters as relevant for constituting an emotion. However, each emotion type is constituted by a typical pattern according to which some features may be more significant than others. Emotions differ strongly where these patterns of features are concerned, while their essential functional roles are the same. We argue that emotions form a unified ontological category that is coherent and can be well defined by their characteristic functional roles. Our account of emotions is supported by data from developmental psychology, neurobiology, evolutionary biology and sociology.