This study aims to understand the associations between child functioning and environmental barriers and the involvement of preschool children, with and without disabilities, in out-of-school activities, namely, home and community activities. Particularly, we aimed to investigate if environmental barriers mediate the relationship between child functioning and their involvement in these activities. Parents of 116 preschool-aged children (42 children with disabilities) reported on children's involvement and environmental factors at home and in the community. Preschool teachers assessed child functioning. Multiple linear regressions and mediation analysis were performed. Results indicated significant associations between child functioning, perceived environmental barriers, and involvement at home and in the community. A significant indirect association of child functioning on involvement through the perception of environmental barriers was found in both contexts. Findings support the biopsychosocial model of participation and a focus on environmental features by practitioners designing and implementing intervention strategies.