Parenting stress (PS) is prospectively associated with children’s lowered socio-emotional functioning; however, little is known about the antecedents and consequences of changes in postpartum parenting stress and its relationship to problematic behaviors in early childhood. This research examined the longitudinal relationships between multiple measures of cognitive readiness to parent, parenting stress (initial level and growth) and child social-emotional competence at age 3. It was hypothesized that lack of cognitive readiness to parent would predict initial level and growth in PS and that initial level and change in parenting stress would, in turn, would be related to poor social-emotional development. Cognitive readiness to parent was assessed at baseline shortly after childbirth; parenting stress, conceptualized as difficult child, parent-child dysfunction and parental distress, was assessed at 6, 12, 24 and 36 months postpartum (i.e. when children were 6 months, 1, 2 and 3 years of age) using the Parenting Stress Index (PSI-SF; Abidin, 1995); children’s socio-emotional functioning was assessed with behavioral rating scale of the Bayley Scales of Infant Development (BSID-II) (BSID-II; Bayley, 1993) which was administered by professionals at age 3. Using a second order growth curve, or curve-of-factors model, the study’s hypotheses were tested with data from the Predicting and Preventing Neglect in Teen Mothers Study (2001–2007), a longitudinal study of 682 first-time mothers. Results from the latent growth curve analyses demonstrated that parenting stress predicted child socio-emotional problems. Specifically, mothers who began parenthood with high stress levels had children with lower levels of pro-social functioning (i.e. more behavior problems). Two measures of cognitive readiness to parent were associated with lower levels of postpartum PS at baseline but social support moderated the relationship between readiness to parent and parenting stress. Implications for interventions aimed at identifying families with children at risk for emotional and developmental problems and/or new parents who demonstrate changes in parenting stress during the postpartum period are discussed in context.