Young children develop social and emotional competence through interactions with others in the two major contexts in which they spend time: home and preschool. This study examined whether parenting stress in the home context is related to the children's behaviour while in preschool. Previous research has suggested that parenting stress negatively influences parenting behaviour, which in turn has been shown to impact children's development. This study examined the direct relationship between parenting stress and children's behaviour in two types of preschool programmes: private day care centres and Head Start. Parenting stress was significantly related to teacher ratings of social competence, internalizing behaviours, and externalizing behaviours, and the effects of parenting behaviour do not appear to mediate this relationship. Parenting stress was most strongly related to children's social competence. Parents' reports of expectations for their child's behaviour appear to weakly moderate the relationship between externalizing behaviour and parenting stress. This study suggests that examination of a parent's level of stress, in addition to parenting practices, may be important in research and interventions with preschool children's behaviour and social competence.