Because of the growing concern that exposures to airborne pollutants have adverse effects on fetal growth and early childhood neurodevelopment, and the knowledge that such exposures are more prevalent in disadvantaged populations, we assessed the joint impact of prenatal exposure to environmental tobacco smoke (ETS) and material hardship on the 2-year cognitive development of inner-city children, adjusted for other sociodemographic risks and chemical exposures. The purpose was to evaluate the neurotoxicant effects of ETS among children experiencing different degrees of socioeconomic disadvantage, within a minority population. The sample did not include children exposed to active maternal smoking in the prenatal period. Results showed significant adverse effects of prenatal residential ETS exposure and the level of material hardship on 2-year cognitive development, as well as a significant interaction between material hardship and ETS, such that children with both ETS exposure and material hardship exhibited the greatest cognitive deficit. In addition, children with prenatal ETS exposure were twice as likely to be classified as significantly delayed, as compared with nonexposed children. Postnatal ETS exposure in the first 2 years of life did not contribute independently to the risk of developmental delay, over and above the risk posed by prenatal ETS exposure. The study concluded that prenatal exposure to ETS in the home has a negative impact on 2-year cognitive development, and this effect is exacerbated under conditions of material hardship in this urban minority sample.