Using data from the Early Childhood Longitudinal Study Kindergarten Class of 2010–2011 (n = 11,000), this study examined the developmental outcomes of 5‐year‐old children in multigrade classrooms (combined prekindergarten and kindergarten classrooms serving 3‐, 4‐, and 5‐year‐olds) compared with those of 5‐year‐olds attending kindergarten‐only classrooms serving primarily 5‐year‐olds. Results from regression and propensity score analyses revealed that 5‐year‐old children who attended multigrade classrooms with prekindergarteners made smaller gains in math and literacy skills and demonstrated less optimal executive function at the end of the school year than children who attended kindergarten‐only classrooms. Classroom‐level factors largely explained the differences in children's academic achievement but did not consistently explain differences in their executive functioning. No consistent differences emerged for children's social‐behavioral development. Highlights This paper examines the implications of multigrade kindergarten classrooms for 5‐year‐olds' school success and the mechanisms through which these classrooms affect children. Five‐year‐olds who attended multigrade classrooms demonstrate smaller gains in academics and exhibit less optimal executive function, which was partially explained by classroom‐level factors. When possible, the implementation of multigrade kindergarten classrooms may need to be re‐evaluated.