Background We evaluated the influence of prenatal exposure to widespread urban air pollutants on the development of self‐regulation and social competence in a longitudinal prospective cohort of children born to nonsmoking minority women in New York City. Methods Air pollutant exposure was estimated categorically by level of polycyclic aromatic hydrocarbon (PAH)‐DNA adducts in maternal blood collected at delivery, providing a biomarker of maternal exposure to PAH over a 2‐ to 3‐month period. Deficient emotional self‐regulation (DESR) was defined as moderate elevations on three specific scales of the child behavior checklist (anxious/depressed, aggressive behavior, and attention problems). We used generalized estimating equations to assess the influence of prenatal exposure to PAH on DESR in children at 3–5, 7, 9, and 11 years of age, adjusted for gender and race/ethnicity. Next, we assessed the association of prenatal exposure to PAH with social competence, as measured by the social responsiveness scale (SRS), the association of impaired self‐regulation with social competence, and whether impairment in self‐regulation mediated the association of prenatal exposure to PAH with social competence. Results We detected a significant interaction (at p = .05) of exposure with time, in which the developmental trajectory of self‐regulatory capacity was delayed in the exposed children. Multiple linear regression revealed a positive association between presence of PAH‐DNA adducts and problems with social competence (p < .04), level of dysregulation and problems with social competence (p < .0001), and evidence that self‐regulation mediates the association of prenatal exposure to PAH with social competence (p < .0007). Conclusions These data suggest that prenatal exposure to PAH produces long‐lasting effects on self‐regulatory capacities across early and middle childhood, and that these deficits point to emerging social problems with real‐world consequences for high‐risk adolescent behaviors in this minority urban cohort.