Summary: This paper presents a study of how exaggerated facial expression in the lower face region affects perception of emotion and the Uncanny Valley phenomenon in realistic, human-like, virtual characters. Characters communicated the six basic emotions, anger, disgust, fear, sadness and surprise with normal and exaggerated mouth movements. Measures were taken for perceived familiarity and human-likeness. The results showed that: an increased intensity of articulation significantly reduced the uncanny for anger; yet increased perception of the uncanny for characters expressing happiness with an exaggeration of mouth movement. The practical implications of these findings are considered when controlling the uncanny in virtual characters.