This article explores the implications of recent welfare-related policy change for the well-being of children in low-income families, and for research investigating child development processes and outcomes. It provides an overview of current welfare-related policies and explores the implications for developmental researchers. The article also synthesizes early findings from research, highlighting both overall impacts and the more nuanced evidence that while families are transitioning off welfare, only a small number are transitioning out of poverty, and a subgroup of families at risk are not faring well. It then examines, from a theoretical and methodological framework, what developmental psychopathology might bring to the study of welfare-related impacts on children in the context of this complex and changing policy landscape, and what welfare researchers might bring to the field of developmental psychopathology. The article concludes with broad recommendations for both research and policy.