Substantial research attention has focused on the psychosocial adjustment problems of children and adolescents residing in disadvantaged neighborhoods. However, less attention has been directed to neighborhood factors within disadvantaged neighborhoods that may facilitate child psychosocial adjustment. An expanded model, assessing how social capital, neighborhood dangerousness, and positive parenting relate to child psychosocial adjustment difficulties, was estimated using structural equation modeling (Lisrel 8.3). Participants included 130 African American mothers and their children (mean age = 12.9 years) residing in inner city New Orleans, LA. The model examined 3 avenues through which social capital (e.g., support, neighborhood cohesion) may relate to fewer child psychosocial adjustment difficulties: a direct relation; through its relation to positive parenting; and through its relation to neighborhood dangerousness. Results indicate that social capital related to child psychosocial adjustment difficulties through positive parenting and neighborhood dangerousness, but not directly. Overall, the proposed model fit the observed data reasonably well. The results suggest that social capital in disadvantaged neighborhoods is important in indirectly facilitating child psychosocial adjustment and should be incorporated into assessment and intervention practices.