Background Research on child development in general has highlighted the importance that the family environment plays in mediating the pathway between exposure to low socio‐economic position (SEP) and child well‐being. While child developmental models in intellectual disability have highlighted the interplay between social context, family environment and child development, little empirical work has attempted to formally evaluate the evidence in support of specific mediating pathways between low SEP and child outcomes. Methods Secondary analysis of cross‐sectional confidentialized needs analysis data collected in three Primary Care Trusts in England covering a total population of 1.25 million people. Case record reviews were undertaken for 46 023 households, 2236 (4.9%) of which contained a child in the target age range with developmental delay. Results Children with developmental delay, when compared with their non‐disabled peers, were at significantly increased risk of poorer health outcomes and of being exposed to a wide range of social determinants of poor health. Controlling for between‐group differences in exposure to social determinants of poor health reduced the risk of developmental delay being associated with poorer health outcomes by 45% for behaviour problems and 89% for risk of significant harm. For children with developmental delay, parenting difficulties appears to play a particularly significant role in partially mediating the effects of low SEP. Conclusions The findings of the present study point to the potential effectiveness of family‐focused early intervention to prevent the emergence and escalation of behavioural difficulties and health problems in children with developmental delay.