Background: Lead can affect early childhood development (ECD) differentially due to nutritional deficiencies that lead to stunted growth, defined as being at least two standard deviations below the average height-for-age. These deficiencies are more frequent among children living in rural locations or with lower socioeconomic status (SES); however, studies at a population level are scarce worldwide. Early childhood development plays a crucial role in influencing a child’s health and wellbeing throughout life. Therefore, the aim of this study was to analyze how stunted growth can modify the association between lead exposure and ECD in children from disadvantaged communities. Methods: Data were analyzed from the 2018 National Health and Nutrition Survey in localities with fewer than 100,000 inhabitants in Mexico (ENSANUT-100K). Capillary blood lead (BPb) levels were measured using a LeadCare II device and dichotomized as detectable (cutoff point ≥ 3.3 µg/dL) and non-detectable. As a measure of ECD, language development was assessed in n = 1394 children, representing 2,415,000 children aged 12–59 months. To assess the association between lead exposure and language z-scores, a linear model was generated adjusted by age, sex, stunted growth, maternal education, socioeconomic status, area, region (north, center, south), and family care characteristics; afterwards, the model was stratified by stunted growth. Results: Fifty percent of children had detectable BPb and 15.3% had stunted growth. BPb showed a marginal inverse association with language z-scores (β: −0.08, 95% CI: −0.53, 0.36). Children with detectable BPb and stunted growth had significantly lower language z-scores (β: −0.40, 95% CI: −0.71, −0.10) than those without stunted growth (β: −0.15, 95% CI: −0.36, 0.06). Conclusions: Children with stunted growth are more vulnerable to the adverse effects of lead exposure. These results add to previous research calling for action to reduce lead exposure, particularly in children with chronic undernutrition.