The purpose of the current study was to predict the development of aggressive behavior from young children's respiratory sinus arrhythmia (RSA) and environmental quality. In a longitudinal sample of 213 children, baseline RSA, RSA suppression in response to a film of crying babies, and a composite measure of environmental quality (incorporating socioeconomic status and marital adjustment) were measured, and parent-reported aggression was assessed from 18 to 54 months of age. Predictions based on biological sensitivity-to-context/differential susceptibility and diathesis-stress models, as well as potential moderation by child sex, were examined. The interaction of baseline RSA with environmental quality predicted the development (slope) and 54-month intercept of mothers' reports of aggression. For girls only, the interaction between baseline RSA and environmental quality predicted the 18-month intercept of fathers' reports. In general, significant negative relations between RSA and aggression were found primarily at high levels of environmental quality. In addition, we found a significant Sex x RSA interaction predicting the slope and 54-month intercept of fathers' reports of aggression, such that RSA was negatively related to aggression for boys but not for girls. Contrary to predictions, no significant main effects or interactions were found for RSA suppression. The results provide mixed but not full support for differential susceptibility theory and provide little support for the diathesis-stress model. (Contains 3 tables and 4 figures.)