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Background To investigate the prevalence and risk factors of premature thelarche (PT) in girls and gynecomastia (GM) in boys in Southern China. Methods We conducted a cross-sectional study of preschool children across 9 cities in Zhejiang province. A total of 6273 children in the age-group of 2–7 years were recruited from January 2014 to March 2015. Relevant information was collected from mothers through face-to-face interviews. Logistic regression models were used to examine the correlates of PT and GM. Odds ratios (ORs) with 95% confidence intervals (CIs) are reported. Results The prevalence of PT among girls was 4.8% and that of GM among boys was 0.8%. One hundred girls were diagnosed with PT before the age of 2 years; 69 (69.0%) of these girls experienced spontaneous resolution of PT. Twenty-four boys were diagnosed with GM before the age of 2 years; 10 (41.7%) of these experienced spontaneous resolution of GM. Children borne of mothers with early onset of menarche and those belonging to high-income families were at a higher risk of premature breast development. Greater consumption of eggs was associated with premature breast development in early childhood. Conclusions Socioeconomic status of family, early onset of menarche in mother, and consumption of eggs were strongly associated with premature breast development in early childhood.