This study leverages nationally representative data (N ≈ 6,000) to examine the magnitude of quality differences between (a) formal and informal early childhood education and care providers; (b) Head Start, prekindergarten, and other center‐based care; and (c) programs serving toddlers and those serving preschoolers. It then documents differences in children's reading and math skills at age 5 between those who had enrolled in formal and informal settings. Cross‐sector differences are substantially reduced when accounting for a set of quality measures, though these measures do less to explain more modest differences in outcomes within the formal sector. Results inform current efforts aimed at improving the quality of early childhood settings by highlighting the large quality differences across sectors and their relationship with child development.