We examined reciprocal associations between early maternal language use and children's language and cognitive development in seventy ethnically diverse, low-income families. Mother–child dyads were videotaped when children were aged 2;0 and 3;0. Video transcripts were analyzed for quantity and lexical diversity of maternal and child language. Child cognitive development was assessed at both ages and child receptive vocabulary was assessed at age 3;0. Maternal language related to children's lexical diversity at each age, and maternal language at age 2;0, was associated with children's receptive vocabulary and cognitive development at age 3;0. Furthermore, children's cognitive development at age 2;0 was associated with maternal language at age 3;0 controlling for maternal language at age 2;0, suggesting bi-directionality in mother–child associations. The quantity and diversity of the language children hear at home has developmental implications for children from low-income households. In addition, children's early cognitive skills further feed into their subsequent language experiences.