BackgroundPrevious research has characterised EEG changes associated with resting activation in primary school children and adults, while task-related activation has only been considered in adults. The current study characterises physiological activation in preschool children and examines the potential value of activation indices for predicting mental health status at two time points. AimsTo investigate how resting activation and task-related activation are represented in 4- to 5-year-old preschool children and examine if these activation indices can predict current and future mental health status. Methods and proceduresFrontal EEG was recorded from 81 preschool children during eyes-closed resting, eyes-open resting, and an inhibitory control task to allow calculation of activation indices. The Child Behaviour Checklist was completed by the child’s parent at this time, and again 6-8 months later after the child’s transition to kindergarten. Outcomes and resultsResting activation was represented by reductions in frontal delta, theta, and alpha power in the eyes-open compared to eyes-closed condition, and an increase in frontal beta power. Task-related activation was represented by increases in frontal delta, theta, and alpha power and a decrease in beta power. Frontal delta and theta task-related activation significantly predicted externalising behaviours in both preschool and kindergarten, with stronger prediction in kindergarten. Conclusions and implicationsThis study characterised resting and task-related activation in preschool children, and reported similar effects to those found in older children and adults for resting activation, with novel effects for task-related activation. As task-related activation indices were predictive of externalising behaviours in both preschool and kindergarten, these results have implications for early identification of children who experience externalising behavioural problems across the transition to school period. What does this study add?This study provides new data on how the fundamental physiological processes of resting and task-related activation, both of which are theorized to contribute to “upstream” processes such as executive functions and broader behaviour, are represented in the frontal EEG of preschool aged children. We also learn that the top-down task-related activation indices for delta and theta activity were predictive of current mental health status and future status after the transition to kindergarten, while the bottom-up resting activation indices were not.