Language development during early childhood is considered an important marker of fetal neurodevelopment. Prenatal cortisol exposure plays a critical role in maturation of the fetal brain; however, the effect on offspring language development needs further investigation. In this prospective observational study we aimed to evaluate the association between maternal third trimester cortisol and early longitudinal offspring language development in the Odense Child Cohort (OCC) and to test whether there were sex differences in the association. The study cohort included 1093 mother-child dyads (570 boys and 523 girls). Fasting morning serum (s-) cortisol was collected from third trimester (gestational week 26-28) pregnant women and measured by liquid chromatography-tandem mass spectrometry. Offspring receptive and productive vocabulary assessments by MacArthur-Bates Communicative Development Inventories parent reports were completed every third month from children age 12-37 months. Levels of cortisol were higher in women carrying a girl (858 ± 214 nmol/L) than in women carrying a boy (820 ± 222 nmol/L). Higher third trimester maternal cortisol levels showed a positive association with development of productive vocabulary in boys at age 12-21 months (OR = 1.23, SE = 0.07, p = .005) and age 22-37 months (OR = 1.09, SE = 0.06, p = .967). Higher maternal cortisol levels in the third trimester were positively associated with receptive vocabulary in girls at 12-21 months of age (OR = 1.16, SE = 0.05, p = .002). Maternal third trimester s-cortisol levels were positively associated with early language development in children at age 12-37 months.