Preschool children living in low‐income families are at increased risk for poor outcomes; early intervention programmes mitigate these risks. While there is considerable evidence of the effectiveness of centre‐based programmes in other jurisdictions, there is limited research about Canadian programmes, specifically programmes that include children and parents. The purpose of this study was to evaluate a single‐site, two‐generation preschool demonstration programme for low‐income families in Canada. A single group, pre‐test (programme intake) /post‐test (programme exit) design with a 7‐year‐old follow‐up was used. Between intake and exit, significant improvements in receptive language and global development were found among the children, and significant improvements in self‐esteem, use of community resources, parenting stress and risk for child maltreatment were found among the parents. These positive improvements were sustained until the children were 7 years old. Public investment in two‐generation preschool programmes may mitigate risks for suboptimal child development and improve parental psychosocial outcomes.