Research Findings: This article examines whether time spent in free choice and teacher-directed activity settings within preschool was associated with indicators of school readiness and the extent to which children's learning was associated with the quality of teachers' behavior within these settings. Participants were 325 preschool teachers and 1,407 children from low-income backgrounds. Teacher-child interactions were measured in multiple cycles across 1 day of classroom observation within teacher-organized free choice and teacher-directed activity settings. The overall proportion of class time spent in free choice was positively related to children's average gains in inhibitory control, whereas class time spent in teacher-directed activities predicted gains in language development and early literacy skills. And more effective teacher-child interactions within the free choice setting were significantly related to children's average gains in language development and early literacy skills. Practice or Policy: Findings confirm that both free choice and teacher-directed settings in early education classrooms can be assets for children's learning; however, the value of time in child-managed activities is partially dependent on teachers' behavior with children.