Background: Relationships within families are interdependent and related to distal environmental factors. Low socioeconomic status (SES) and high household chaos (distal factors) have been linked to less positive marital and parent-child relationships, but have not yet been examined with regard to young children's sibling relationships. The present study tested direct associations between these distal factors and sibling relationship quality, as well as examining parenting as a potential mediator and/or moderator. Method: One hundred and eighteen families with children aged 4 to 8 years were interviewed and completed questionnaires during home visits. Children provided reports about the quality of their sibling relationships via a puppet interview, and mothers and fathers reported on household chaos and their exertion of harsh discipline. Researchers rated parental warmth towards the children. Finally, parental education and household density were assessed as indicators of SES. Results: Using structural equation modelling (SEM), we found that lower levels of household chaos were related to better quality sibling relationships, and that this link was mediated by maternal warmth and paternal harsh discipline, as well as moderated by maternal harsh discipline. Conclusion: Household chaos was more strongly linked to relationship quality between family members than SES, warranting further research and practical application. The study of children's sibling relationships should take into account inter-relations between proximal and distal environmental factors to fully reveal the complexity of family life.