The present study examined the way in which neighborhood impoverishment, neighborhood social processes, and parenting practices relate to the development of aggressive behavior among children aged 6–8 years raised in low‐income neighborhoods. A total of 424 children (male = 207, female = 217) and their families participated in the study. Hierarchical linear regression revealed that neighborhood impoverishment, neighborhood social processes, and parental monitoring/supervision were associated with childhood aggression 2 years later. Neighborhood social processes did not mediate the relation between neighborhood impoverishment and childhood aggression, nor did parental monitoring/supervision mediate the relation between neighborhood characteristics and childhood aggression. Children residing in neighborhoods with substantial poverty are at greater risk of developing aggressive behavior. Strong neighborhood social processes and high levels of parental supervision/monitoring are associated with lower levels of aggression. Despite the protective benefits of neighborhood social processes and high‐quality parenting, neighborhood economic deprivation continues to elevate risk of developing aggressive behavior.
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