Associations between prenatal maternal psychological distress and offspring developmental outcomes are well documented, yet relatively little research has examined links between maternal distress and development in utero, prior to postpartum influences. Fetal heart rate (FHR) parameters are established indices of central and autonomic nervous system maturation and function which demonstrate continuity with postnatal outcomes. This prospective, longitudinal study of 149 maternal–fetal pairs evaluated associations between prenatal maternal distress, FHR parameters, and dimensions of infant temperament. Women reported their symptoms of psychological distress at five prenatal visits, and FHR monitoring was conducted at the last three visits. Maternal report of infant temperament was collected at 3 and 6 months of age. Exposure to elevated prenatal maternal psychological distress was associated with higher late-gestation resting mean FHR (FHRM) among female but not male fetuses. Higher late-gestation FHRM was associated with lower infant orienting/regulation and with higher infant negative affectivity, and these associations did not differ by infant sex. A path analysis identified higher FHRM as one pathway by which elevated prenatal maternal distress was associated with lower orienting/regulation among female infants. Findings suggest that, for females, elevated maternal distress alters fetal development, with implications for postnatal function. Results also support the notion that, for both sexes, individual differences in regulation emerge prenatally and are maintained into infancy. Collectively, these findings underscore the utility of direct assessment of development in utero when examining if prenatal experiences are carried forward into postnatal life.