As states respond to major welfare legislation in providing assistance and other interventions to help adults on welfare become ready to work, the challenge of helping these adults in their parenting skills and in promoting resilience in their children has often been ignored. This issue brief addresses the challenge of promoting resilience in children whose parents are experiencing domestic violence, substance abuse, and serious mental health issues, including depression. Section 1 of the brief highlights the dimensions of the challenge, focusing on policy issues, family characteristics, and challenges for service providers. Section 2 highlights services strategies to: (1) promote resilience, social competence, and school readiness in the children of the most vulnerable parents; (2) repair or prevent damaged parent-child relationships among young children whose parents face severe risks; and (3) ensure the safety of the children while helping parents meet the work-related goals of the Personal Responsibility and Work Opportunity Reconciliation Act. Section 3 suggests steps that policymakers, service providers, private funders, and advocates might take to improve outcomes for and investments in young children in high-risk families. The brief's three appendices describe the "Starting Early Starting Smart" sites, list helpful national organizations and agencies, and provide contact information for several programs. (Contains 63 endnotes.) (KB)