Infants born preterm (less than 37 weeks completed gestation) have a higher risk of suboptimal cognitive and behavioral outcomes when compared with their term-born counterparts. The risk and severity of poor outcome increases as gestational age at birth decreases; however, not all children born preterm will develop deficits, and environmental influences post birth may have a role in shaping developmental outcomes. Whilst early preterm birth is not preventable, it may be possible to intervene after birth via the environment in order to improve outcomes. The diathesis-stress theory hypothesizes that vulnerable individuals will have worse outcomes after a negative environmental exposure, whereas the differential susceptibility theory posits that vulnerable (or plastic) individuals can be both adversely and positively affected by environmental factors. These two theories were compared in 535 children born <33 weeks' gestation. The interaction between the degree of prematurity and the home environment (as measured by the Home Screening Questionnaire) at 18 months on cognition (Intelligence Quotient from the Wechsler Abbreviated Scale of Intelligence) and behavior (Total Difficulties Score from the Strengths and Difficulties Questionnaire) at 7 years was explored. Evidence was not found for either theory, although a supportive/stimulating home environment appeared to contribute to a decrease in the risk or severity of suboptimal scores. Future research is needed to establish stronger evidence in order to inform interventions to improve the home environment of children born preterm.