Background: Parental criminal offending is an established risk factor for offending among offspring, but little evidence is available indicating the impact of offending on early childhood functioning. We used data from a large Australian population cohort to determine associations between exposure to parental offending and a range of developmental outcomes at age 5 years. Method: Multi-generation data in 66 477 children and their parents from the New South Wales Child Development Study were combined using data linkage. Logistic and multinomial regressions tested associations between any and violent offending histories of parents (fathers, mothers, or both parents) obtained from official records, and multiple measures of early childhood developmental functioning (social, emotional-behavioural, cognitive, communication and physical domains) obtained from the teacher-reported 2009 Australian Early Development Census. Results: Parental offending conferred significantly increased risk of vulnerability on all domains, particularly the cognitive domain. Greater risk magnitudes were observed for offending by both parents and by mothers than by fathers, and for violent than for any offending. For all parental offending exposures, vulnerability on multiple domains (where medium to large effects were observed) was more likely than on a single domain (small to medium effects). Relationships remained significant and of comparable magnitude following adjustment for sociodemographic covariates. Conclusions: The effect of parental offending on early childhood developmental outcomes is pervasive, with the strongest effects on functioning apparent when both parents engage in violent offending. Supporting affected families in early childhood might mitigate both early developmental vulnerability and the propensity for later delinquency among these offspring.