The extent to which contextual stress in families affects children's development is a research topic that has been given considerable emphasis within the emergent field of developmental psychopathology (Garmezy, 1983, 1984; Garmezy, Masten, & Tellegen, 1984). This chapter presents research findings relating maternal stress and children's school outcomes, conducted as part of the Mother-Child Interaction Research Project at the University of Minnesota. The Mother-Child Project has accumulated data on the role of maternal stress in predicting child maltreatment (Egeland, Breitenbucher, & Rosenberg, 1980; Pianta, Egeland, & Erickson, 1989) and as a factor related to the quality of attachment relationships (Erickson, Sroufe, & Egeland, 1985; Egeland & Farber, 1984). These studies have suggested that maternal stress played a major role in determining certain parenting and child outcomes in this sample. Specifically, in this chapter we present data on the effects of maternal and family psychosocial stress on children's development in the early school years and the factors related to competence in a high-stress subsample. These introductory sections address issues germane to the study of contextual stress and its effects on children. Risk research and the study of stressful life events By and large, studies that have examined the role of contextual stress in child development have chosen one of two possible strategies for measuring contextual stress, both of which have certain advantages and disadvantages. The first uses life events scales as measures of general environmental stress, and the second involves identification of subjects on the basis of exposure to a particular stressor, such as divorce (Wallerstein, 1983) or parental mental illness (see chapters 11 and 12 in this volume).