ObjectiveThis study analyses the mediating effects of early health prior to age 3 on the association between early poverty and the health outcomes of children at age 12.DesignPopulation-based longitudinal birth cohort study.SettingTaiwan Birth Cohort Study (TBCS), 2005–2017.Participants16 847 TBCS children born in 2005 and followed up at 18 months, 3, 5, 8 and 12 years with available data on poverty and health status.Main outcome measuresChild’s general health, measured by the mothers’ ratings of their child’s health, and hospitalisation experience at 12 years of age.ResultsAmong the TBCS children, the prevalence of fair/poor health and hospitalisation was 20.8% and 2.5% at age 12. The ORs of experiencing fair/poor health and hospitalisation at age 12 were 1.33 (95% CI 1.21 to 1.45) and 1.35 (1.07 to 1.69) for early poverty, respectively. When early poor health was added in the multiple logistic regression models, the effects of early poverty were attenuated on poor general health and no longer significant on hospitalisation for children aged 12 years. Mediation analysis showed that 50%–87% of the total effect of early poverty on health at age 12 was mediated by early health status before age 3.ConclusionsOur findings suggest that poor health in early life plays as a significant mediator in the relationship between early poverty and the long-term health outcomes of children. Universal health coverage thus should be achieved to prevent the adverse health effects of poverty throughout the life course, as one of the most important strategies for children growing up in poverty.