Objective: To examine the efficacy of a developmentally appropriate parent-child cognitive behavioral therapy (CBT) protocol for anxiety disorders in children ages 4-7 years. Method: Design: Randomized wait-list controlled trial. Conduct: Sixty-four children (53% female, mean age 5.4 years, 80% European American) with anxiety disorders were randomized to a parent-child CBT intervention (n = 34) or a 6-month wait-list condition (n = 30). Children were assessed by interviewers blind to treatment assignment, using structured diagnostic interviews with parents, laboratory assessments of behavioral inhibition, and parent questionnaires. Analysis: Chi-square analyses of outcome rates and linear and ordinal regression of repeated measures, examining time by intervention interactions. Results: The response rate (much or very much improved on the Clinical Global Impression Scale for Anxiety) among 57 completers was 69% versus 32% (CBT vs. controls), p less than 0.01; intent-to-treat: 59% vs. 30%, p = 0.016. Treated children showed a significantly greater decrease in anxiety disorders (effect size [ES] = 0.55) and increase in parent-rated coping (ES = 0.69) than controls, as well as significantly better CGI improvement on social phobia/avoidant disorder (ES = 0.95), separation anxiety disorder (ES = 0.82), and specific phobia (ES = 0.78), but not on generalized anxiety disorder. Results on the Child Behavior Checklist Internalizing scale were not significant and were limited by low return rates. Treatment response was unrelated to age or parental anxiety but was negatively predicted by behavioral inhibition. Gains were maintained at 1-year follow-up. Conclusions: Results suggest that developmentally modified parent-child CBT may show promise in 4- to 7-year-old children. (Contains 1 figure, 1 footnote and 5 tables.)