Online learning has been increasing rapidly at community colleges, especially in low-division high-demand coursework, such as developmental education. While existing studies have identified negative effects associated with online instruction in semester-long coursework in this particular setting, there is less evidence about how distance learning influences students' completion of developmental education coursework and, more importantly, their subsequent academic outcomes. This paper examines the impact of fully online instruction, compared with traditional face-to-face instruction, on both concurrent developmental course outcomes and downstream outcomes. We use an administrative dataset from a state community college system that includes longitudinal student-unit record data from more than 40,000 students enrolled in developmental education courses between 2005 and 2012, and employ a two-way fixed effects model that controls for selection both at the course- and student-level. We find that taking one's first developmental course through the online format reduces developmental course completion rate by 13 percentage points and subsequent enrollment in the gatekeeper course by 7 percentage points. Successful completion of developmental and subsequent gateway coursework represents critical milestones among community college students. This paper provides insight on how delivery format influences both the concurrent and downstream outcomes of developmental education students.