Robust research shows that parenting stress is associated with lower levels of parental sensitivity toward their children (i.e., parental responsiveness), thus negatively influencing child outcomes. While research supports these associations, most studies utilize self-report measures of parental responsiveness and exclude fathers. This study examines whether observed parental responsiveness mediates the relationship between parenting stress and child cognitive development, prosocial behavior, and behavior problems in a large sample of diverse lowincome families. Data were obtained from the Building Strong Families Project (N = 1,173). Dyadic bootstrapped mediation models were estimated in Mplus. For mothers and fathers, parenting stress was negatively associated with responsiveness (B = −0.08, 95% CI = [−0.14, −0.02], p = .012), and responsiveness was positively associated with child cognitive development (B = 0.15, 95% CI = [0.11, 0.19], p < .001) and child prosocial behavior (B = 0.12, 95% CI = [0.08, 0.15], p < .001). Mothers' responsiveness was negatively associated with child behavior problems (B = −0.07, 95% CI = [−0.13, −0.01], p = .020), but fathers' responsiveness was not (B = −0.01, 95% CI = [−0.06, 0.05], p = .814). For mothers and fathers, parenting stress was indirectly related to child cognitive development and prosocial behavior via responsiveness. Indirect effects were not found for mothers or fathers when predicting child behavior problems. To improve children's wellbeing, interventions may consider strengthening responsiveness and reducing parental stress among both mothers and fathers.