This study examined long-term outcomes of children who spent their first 1 to 18 months in a U.S. prison nursery. Behavioral development in 47 preschool children who lived in a prison nursery was compared with 64 children from a large national dataset who were separated from their mothers because of incarceration. Separation was associated with significantly worse anxious/depressed scores, even after controlling for risks in the caregiving environment. Findings suggest that prison nursery co-residence with developmental support confers some resilience in children who experience early maternal incarceration. Co-residence programs should be promoted as a best practice for incarcerated childbearing women.