There is much evidence that parents' perceptions of children's competence affect the development of children's academic functioning. In the current research, the possibility that this is moderated by parents' theories about the stability of competence was examined. In a 2-wave, 1-year study of 126 children (9 to 12 years old) and their mothers, children's academic functioning (i.e., grades, perceptions of competence, attributions for performance, and mastery orientation) and affective functioning (i.e., self-esteem and depressive symptoms) were examined. Among mothers with relatively high entity theories, their perceptions acted as self-fulfilling prophecies foreshadowing children's academic and affective functioning over time. However, among mothers with relatively low entity theories, mothers' perceptions did not predict children's academic and affective functioning.