Atypical responses to teacher rewards, discipline and different forms of instructional methods have been identified as potential contributors to disruptive behavior, low school engagement, and academic underachievement in children with elevated callous-unemotional (CU) traits. To date, research on CU traits in schools has relied on interview or questionnaire methods and has predominantly been conducted in Western countries. Thus, the present study aims to investigate the relationships between CU traits and children’s responses to teacher rewards, discipline and instructional methods in the Chinese preschool context using classroom observation. Eight teachers (7 females, 1 male; M = 37.66 years) and 116 children (56% girls; M = 5.16 years) from two mainstream Chinese preschools participated in the study. Of the 116 eligible children, the behavior of 108 children from four classes were observed during classroom activities. Findings indicated that CU traits were not related to children’s responses to discipline, nor did CU traits moderate the relationship between instructional methods and children’s academic engagement. Higher CU traits predicted a greater frequency of one-to-one teacher-child interaction. Our findings offer initial insights into the potential of early school-based interventions in fostering engagement and prosocial behavior among children with CU traits. However, they also highlight the need for additional support for preschool teachers, who face the challenge of managing these high-risk children who appear to require more individual time and attention.