Existing evidence highlights the significance of family STEM learning experiences during early childhood. However, there is a lack of research specific to early childhood family-based learning in the field of engineering, especially with preschool-age children (three to five years old). To address this gap and inform engineering education programs for young children, we conducted a design-based research study in collaboration with 15 Spanish-and English-speaking families with preschool-age children from low-income communities. Our study aimed to develop and test a series of family-based engineering design activities while also identifying underlying design principles. Guided by an asset-based family learning framework, which acknowledges the strengths and assets that families bring to STEM learning experiences and recognizes the unique nature of family learning compared to other contexts, we iteratively tested and revised three family-based engineering activities over approximately five months. Data were collected through videos of families interacting with the activities at home as well as postinteraction interviews with parents and caregivers. Based on the iterative testing and retrospective analysis, we identified three overarching design principles: (1) carefully consider the affordances of the "activity materials," including open-endedness, flexibility, level of difficulty, and nature of feedback; (2) include "narrative contexts" and supports that motivate engagement in engineering practices and support user-centered design; and (3) present "design challenges" that connect with family interests and leverage the ways families naturally orient to the materials. These design principles extend existing research and highlight how educators can support the unique goals and learning practices of families through early childhood engineering education programs.