Background The enduring impact of childhood maltreatment on biological systems and ensuing psychopathology remains incompletely understood. Long‐term effects of stress may be reflected in cumulative cortisol secretion over several months, which is now quantifiable via hair cortisol concentrations (HCC). We conducted a first comprehensive investigation utilizing the potential of hair cortisol analysis in a large sample of maltreated and nonmaltreated children and adolescents. Method Participants included 537 children and adolescents (3–16 years; 272 females) with maltreatment (n = 245) or without maltreatment histories (n = 292). Maltreated subjects were recruited from child protection services (CPS; n = 95), youth psychiatric services (n = 56), and the community (n = 94). Maltreatment was coded using the Maltreatment Classification System drawing on caregiver interviews and complemented with CPS records. Caregivers and teachers reported on child mental health. HCC were assessed in the first 3 cm hair segment. Results Analyses uniformly supported that maltreatment coincides with a gradual and dose‐dependent reduction in HCC from 9 to 10 years onwards relative to nonmaltreated controls. This pattern emerged consistently from both group comparisons between maltreated and nonmaltreated subjects (27.6% HCC reduction in maltreated 9–16‐year‐olds) and dimensional analyses within maltreated subjects, with lower HCC related to greater maltreatment chronicity and number of subtypes. Moreover, both group comparisons and dimensional analyses within maltreated youth revealed that relative HCC reduction mediates the effect of maltreatment on externalizing symptoms. Conclusions From middle childhood onwards, maltreatment coincides with a relative reduction in cortisol secretion, which, in turn, may predispose to externalizing symptoms.