The present investigation was concerned with the impact of prenatal and perinatal complications (biological risks) and of family adversity (psychosocial risks) on developmental status at age 4 1/2. In a prospective study the developmental course of 362 children (including 210 high-risk children) was followed from birth to age 4 1/2 years. A multilevel approach was used to assess all relevant domains of functioning (i.e. motor, cognitive and social-emotional development). The goal was to obtain information about the effects of biological and psychosocial risks alone and together on outcome in the different domains of functioning. The results show that psychosocial risk factors posed the greatest threat to normal development. Children with psychosocial risks were significantly behind those without such risks in all areas of functioning. Biological risks mainly affected motor development, their negative effects on cognitive and social-emotional functioning having been largely compensated for by age 4 1/2. The extent of an adverse outcome was related to both the degree of risk load and the number of risk factors, whereas interactions among risks were of only minor relevance. An adverse outcome is not inevitable, however: Despite the risks most of the at-risk children showed normal development at age 4 1/2.