--- - |2+ Abstract This study examined children's morning hypothalamic–pituitary–adrenal (HPA) axis activation as a moderator of links between hostile, over‐reactive parenting at age 4.5 years and children's skills for success in school (higher executive function and literacy and less externalizing behaviour) at age 6. Participants included 361 adoptive families. Parenting was self‐reported. HPA axis activation was measured by basal levels in morning cortisol. Executive function and literacy were assessed via standardized tasks. Externalizing behaviour was reported by teachers. Results indicated that hostile, over‐reactive parenting predicted more externalizing behaviour and lower executive functioning regardless of children's morning HPA axis activation. HPA axis activation moderated the effects of hostile, over‐reactive parenting on literacy. Among children with moderate to high morning HPA axis activation (approximately 60% of the sample), harsh parenting was linked with lower literacy; children with low morning HPA axis activation exhibited better literacy in the context of more hostile, over‐reactive parenting. Yet, across the sample, hostile, over‐reactive parenting remained in the low to moderate range, not in the high range. Findings are discussed in the context of considering not only whether children's stress system activation moderates responses to their environments but also how these processes operate for different developmental outcomes. Highlights This study examined children's morning HPA axis activation as a moderator of links between parenting at age 4.5 and children's skills for success in school at age 6. Participants included 361 adoptive families, measured with cortisol, parenting, executive function, literacy, and externalizing behavior. Children's morning cortisol levels moderated the associations between hostile, over‐reactive parenting, and emergent literacy but not externalizing behavior or executive function. - Infant and Child Development, Volume 27, Issue 4, July/August 2018.