We investigated whether parental family stress during pregnancy is associated with cognitive functioning in early childhood in a population-based cohort (n = 3139). Family stress was assessed using the Family Assessment Device at the 20th week of pregnancy and was reported by mothers and fathers. Mothers completed the MacArthur Communicative Development Inventory, measuring children's verbal cognitive functioning, when children were 18 months and they completed the Parent Report of Children's Abilities, measuring nonverbal cognitive functioning, when children were 2 years old. Maternal prenatal family stress was related to children's low word comprehension and poorer nonverbal cognitive development independent of paternal reports. In a subset of 639 children, maternal prenatal family stress was also associated with observational assessments of poor effortful control at age 37 months. Paternal prenatal family stress was only related to poorer nonverbal cognitive development, independent of the mother. When both parents had high levels of prenatal family stress, children displayed particularly poor nonverbal cognitive development. These findings emphasize the significance of parental prenatal family stress for child developmental outcomes. (Contains 5 tables.)