BACKGROUND: Mental health problems comprise an international public health issue affecting up to 20% of children and show considerable stability. We aimed to identify child, parenting, and family predictors from infancy in the development of externalising and internalising behaviour problems by age 3 years. METHODS: Design Longitudinal, population-based survey completed by primary caregivers when children were 7, 12, 18, 24 and 36 months old. Participants 733 children sequentially recruited at 6-7 months from routine well-child appointments (August-September 2004) across six socio-economically and culturally diverse government areas in Victoria, Australia; 589 (80%) retained at 3 years. Measures 7 months: sociodemographic characteristics, maternal mental health (Depression Anxiety Stress Scale (DASS)), substance misuse, home violence, social isolation, infant temperament; 12 months: partner relationship, parenting (Parent Behavior Checklist (PBC)); 18, 24 and 36 months: child behaviour (Child Behavior Checklist 1(1/2)-5 (CBCL)), PBC, DASS. RESULTS: Sixty-nine percent of all families attending well-child clinics took part. The consistent and cumulative predictors of externalising behaviours were parent stress and harsh discipline. Predictors of internalising behaviours included small family size, parent distress, and parenting. Twenty-five percent of variation in early externalising behaviour and 17% of variation in early internalising behaviour was explained. CONCLUSIONS: Effective and cost-efficient population approaches to preventing mental health problems early in childhood are urgently needed. Programmes must support parents in reducing personal stress as well as negative parenting practices.