Little is known about the role of stress reactivity in the emergence of psychopathology across early childhood. In this longitudinal study, we tested the hypothesis that child cortisol reactivity at age three moderates associations between early parenting and children’s internalizing and externalizing symptoms from age three to age six. 160 children were assessed at age three and 135 children were reassessed at age six. At age three, we exposed children to stress-inducing laboratory tasks, during which we obtained four salivary cortisol samples, and parental hostility was assessed using an observational parent-child interaction task. At ages three and six, child psychiatric symptoms were assessed using a semi-structured clinical interview with parents. Results indicated that the combination of high child cortisol reactivity and high observed parental hostility at age three was associated with greater concurrent externalizing symptoms at age three and predicted increases in internalizing and externalizing symptoms from age three to age six. Findings highlight that increased stress reactivity, within the context of hostile parenting, plays a role in the emergence of psychopathology from preschool to school entry.