New research suggests that exceptionally stressful experiences early in life may have long-term consequences for a child's learning, behavior, and both physical and mental health. Some types of "positive stress" in a child's life--overcoming the challenges and frustrations of learning a new, difficult task, for instance--can be beneficial. Severe, uncontrollable, chronic adversity--what this report defines as "toxic stress"--on the other hand, can produce detrimental effects on developing brain architecture as well as on the chemical and physiological systems that help an individual adapt to stressful events. This has implications for many policy issues, including family and medical leave, child care quality and availability, mental health services, and family support programs. This report explains how significant adversity early in life can alter--in a lasting way--a child's capacity to learn and to adapt to stressful situations, how sensitive and responsive caregiving can buffer the effects of such stress, and how policies could be shaped to minimize the disruptive impacts of toxic stress on young children.