Using data from more than 7000 children from the Norwegian Mother, Father and Child (MoBa) study, this study explored the role of school readiness and teacher-child closeness in the early child education and care (ECEC) setting for the prospective academic and social development of children with early externalizing problems. Mother, ECEC teachers, and schoolteacher ratings were applied. Latent moderated mediation analyses within a SEM framework were performed. Early externalizing problems at age three were associated with less school readiness at age five, but this association was weaker among children with closer teacher-child relationships. School readiness mediated the link from early externalizing problems to later academic and social adjustment difficulties, but this long-term indirect effect also decreased with increasing levels of teacher-child closeness. With regards to intervention efforts, the study demonstrates the potentially important role of ECEC teachers for the long-term social and academic adjustment of children with early externalizing problems.