Rationale: Emerging evidence indicates that psychosocial stress enhances the effect of traffic exposure on the development of asthma. Objectives: We hypothesized that psychosocial stress would also modify the effect of traffic exposure on lung function deficits. Methods: We studied 1,399 participants in the Southern California Children's Health Study undergoing lung function testing (mean age, 11.2 yr). We used hierarchical mixed models to assess the joint effect of traffic-related air pollution and stress on lung function. Measurements and Main Results: Psychosocial stress in each child's household was assessed based on parental response to the perceived stress scale (range, 0-16) at study entry. Exposures to nitric oxide, nitrogen dioxide, and total oxides of nitrogen (NO x ), surrogates of the traffic-related pollution mixture, were estimated at schools and residences based on a land-use regression model. Among children from high-stress households (parental perceived stress scale .4) deficits in FEV 1 of 4.5 (95% confidence interval, 26.5 to 22.4) and of 2.8% (25.7 to 0.3) were associated with each 21.8 ppb increase in NO x at homes and schools, respectively. These pollutant effects were significantly larger in the high-stress compared with lower-stress households (interaction P value 0.007 and 0.05 for residential and school NOx, respectively). No significant NOx effects were observed in children from low-stress households. A similar pattern of association was observed for FVC. The observed associations for FEV 1 and FVC remained after adjusting for sociodemographic factors and after restricting the analysis to children who do not have asthma. Conclusions: A high-stress home environment is associated with increased susceptibility to lung function effects of air pollution both at home and at school.