Introduction. There is clear evidence that children raised in families affected by parental drug use are at high risk for a wide range of adverse outcomes, including; early cognitive and language delay (van Baar & de Graaff, 1994); poor school attendance and educational under-achievement (Hogan & Higgins, 2001; Steinhausen, Blattmann, & Pfund, 2007); substance abuse and psychological problems (Keller, Catalano, Haggerty, & Fleming, 2002; Kilpatrick, Acierno, Saunders, Resnick, Best, & Schnurr, 2000; Kolar, 1994; Lagasse, Hammond, Liu, Lester, Shankaran, Bada et al., 2006; Merikangas, Dierker, & Szatmari, 1998; Moss, Vanyukov, Majumder, Kirisci, & Tarter, 1995; Nunes, Weissman, Goldstein, McAvay, Beckford, Seracini et al., 2000; Nunes, Weissman, Goldstein, McAvay, Seracini, Verdeli et al., 1998; Stanger, Higgins, Bickel, Elk, Grabowski, Schmitz et al., 1999). Careful examination of the impact of parental drug use on children and the developmental mechanisms associated with risk and resilience is central to the establishment of appropriate intervention. Children born to mothers who are drug dependent and enrolled in methadone maintenance treatment during pregnancy face the “double jeopardy” of prenatal drug exposure and post-natal environmental disadvantage (Zuckerman & Brown, 1993). This research aimed to identify early developmental difficulties or differences in communicative and cognitive development, and in particular the joint attention skills, of young children born to mothers engaged in methadone maintenance treatment. Of particular interest was the way in which pre- and postnatal factors combined to influence developmental outcome at age 2 years. This prospective, longitudinal study offered the opportunity to indentify early indicators of developmental differences in this group and thus, contribute to a better understanding of the long-term mechanisms of risk. Research Methods. Sixty children born to mothers engaged in methadone maintenance treatment and 60 randomly-selected, non-exposed comparison children were followed prospectively from birth to age 2 years. During the third trimester of pregnancy, mothers completed a comprehensive maternal interview. At 18 months, children were visited at home and evaluations of the social background, family and childrearing context were completed. At age 2 years, all children underwent a developmental assessment that included the Early Social Communication Scales (ESCS) (Mundy, Hogan, & Doehring, 1996). The ESCS consists of a semi-structured series of activities, which assess the joint attention abilities, social skills and interactive behaviour of infants aged 8 to 30 months. The focus of this study was on children’s use of two types of communicative behaviour – requesting and affect-sharing communications. Alongside the ESCS, the Mental Development Index (MDI) and language items from the Bayley Scales of Infant Development (BSID-II) (Bayley, 1993) and the Communication and Symbolic Behaviour Scales– Developmental Profile (CSBS-DP) (Wetherby & Prizant, 1998), were used to assess concurrent cognitive and language skills. Results. The results of this study indicated that children born to mothers engaged in methadone maintenance treatment were typically growing up in single-parent families (p=<.0001) and in welfare-dependent households (p=<.0001). Methadone-exposed children were also more likely to be living in out-of-home care placements at age 18months than comparison group children (p=<.0001). Their caregivers were less likely to be accepting of (p=<.01) and responsive to their needs (p=.008) compared to parents of comparison children. At home, methadone-exposed children had fewer learning opportunities (p=<.0001) and were more likely to live in houses where the television was on for longer, compared to non-exposed children (p=<.001). Caregivers of methadone-exposed toddlers reported more depression (p=<.0001), more illicit substance use (p=<.0001) and more family stress (p=.004) than comparison caregivers. They were also more often victims of psychological aggression (p=.002) and violence from others (p=<.0001), but they also reported that they were more likely to use psychological aggression (p=<.001) and physical punishment (p=<.03) in managing their children’s behaviour than comparison caregivers. The developmental assessment at age 2 years suggested that methadone-exposed children were significantly more likely to engage in communicative behaviour, which expressed a request, than non-exposed, comparison children (p=.03). On the other hand, analysis suggested that whilst methadone-exposed children were less likely than comparison children to engage in communication, which had the goal of affect sharing, this difference did not reach significance (p=.27). Previous research links greater use of requesting behaviours with later behaviour problems (Sheinkopf, Mundy, Claussen, & Willoughby, 2004). The MDI, BSID language measure and CSBS results further indicated significant delay in both cognitive (p =<.0001) and language development (p =<.0001) in the methadone-exposed group, compared to the comparison group. Between group differences were attenuated by control for confounding social background and prenatal factors, including maternal education, gestational age, other drug exposures during pregnancy and gender, but significant differences remained. Further analysis suggested that parenting practices and family environment factors were important intervening influences on the relationship between being born to a mother engaged in methadone maintenance treatment and poorer outcomes. More specifically, the association between methadone-exposure and differences in joint attention behaviours, were explained by caregiver use of psychological aggression (p=.01), caregiver disruption (p=.07) and caregiver stress (p=.01). On the other hand, poorer cognitive and language outcomes were explained by family contextual factors, including a less child-centered home environment (p=.008), caregiver disruption (p=.001), increased use of background TV (p=.02) and fewer stimulating activities (p=.06) Discussion. The family circumstances of children born to mothers engaged in methadone maintenance treatment during pregnancy, when compared with a group of randomly-selected comparison children, showed pervasive differences and multiple disadvantage. Findings suggest that these differences in family disruption, family functioning and parenting practices explain the negative outcomes of methadone-exposed children in early cognitive and communication skills at age 2 years. These results raise concerns for the later functioning of methadone-exposed children and emphasise the key importance of early intervention for children and families affected by parental drug use.