Differences in racial socialization practices and their effects were examined in a sample of 241 African American 1st graders (average age 6.59 years) living in an urban area. Child outcomes included cognitive development, receptive language skills, and child problem behavior. The cultural environment of the home was associated with higher cognitive scores for boys living in high negative social climate and low social capital neighborhoods and for girls living in high social capital neighborhoods. The positive association of promotion of mistrust and child behavior problems was magnified in neighborhoods that had low levels of social capital. A high negative social climate in the neighborhood attenuated the positive association between preparation for bias/promotion of mistrust and externalizing problems.