Extant literature has demonstrated that children's diurnal stress physiology often looks different on childcare versus home days. Specifically, children experience a rise in cortisol, rather than a decline, over the day while in full-time care. Additionally, temperamental fit within classroom environment may influence both child and teacher cortisol and outcomes. The current study investigated whether teachers' cortisol levels (n = 11) were associated with child cortisol levels (n = 71, mean age = 4.18 ± 0.81, 51% female) in the classroom while taking into account temperament, child sex assigned at birth, and classroom quality. Cortisol samples were collected on consecutive days at home and childcare for children, and at childcare for teachers. We hypothesized that (1) teacher cortisol will predict child afternoon cortisol, (2) that a portion of the variance in this relationship will be accounted for by classroom quality. Using a cross-sectional design, children in this sample had higher cortisol values in the afternoon while at childcare than at similar times of day at home. Teachers demonstrated a typical diurnal decline across the day but variation in total cortisol output at childcare. Two distinct predictors of afternoon cortisol levels were identified in children attending childcare: child age and mean teacher cortisol levels across the day, while negative affect and classroom quality were not significant. Younger children and children whose teachers had higher mean cortisol levels were more likely to have high afternoon cortisol at childcare. Higher diurnal cortisol values for teachers may indicate a higher stress environment for both teachers and children. These preliminary findings suggest that teacher stress may not only have implications for children in terms of teacher burnout, high staff turnover, and learning, but possibly also for children's health and well-being. Implications for research and policy, as well as limitations and strengths, are discussed.