This investigation examined transactional relations across contextual strain, parenting quality, and child adjustment in 209 mothers and children at 24, 42, and 72 months of age. Independent ratings of mothers' stressful life events, social support, and relationship quality provided an objective measure of maternal contextual strain. Observers evaluated parenting quality during parent–child interactions at each time point. Child regulatory functioning during laboratory tasks at 24 and 42 months was evaluated by independent observers based on both behavioral (e.g., noncompliance, distractibility) and emotional (e.g., frustration, anger) indices. At 72 months, teachers reported on children's externalizing behaviors, and children completed objective measures of academic achievement. Nested path analyses were used to evaluate increasingly complex models of influence, including transactional relations between child and parent, effects from contextual strain to parenting and child adaptation, and reciprocal effects from child and parent behavior to contextual strain. Over and above stability within each domain and cross-sectional cross-domain covariation, significant paths emerged from maternal contextual strain to subsequent child adjustment. Bidirectional relations between parenting and child adjustment were especially prominent among boys. These findings counter unidirectional models of parent-mediated contextual effects by highlighting the direct influences of contextual strain and parent–child transactions on early childhood behavioral and academic adjustment, respectively.