Exposure to traffic-related pollution (TRP) and tobacco smoke have been associated with new onset asthma in children. Psychosocial stress-related susceptibility has been proposed to explain social disparities in asthma. We investigated whether low socioeconomic status (SES) or high parental stress modified the effect of TRP and in utero tobacco smoke exposure on new onset asthma. We identified 2,497 children aged 5-9 years with no history of asthma or wheeze at study entry (2002-2003) into the Children's Health Study, a prospective cohort study in southern California. The primary outcome was parental report of doctor-diagnosed new onset asthma during 3 years of follow-up. Residential exposure to TRP was assessed using a line source dispersion model. Information about maternal smoking during pregnancy, parental education (a proxy for SES), and parental stress were collected in the study baseline questionnaire. The risk of asthma attributable to TRP was significantly higher for subjects with high parental stress (HR 1.51 across the interquartile range for TRP; 95% CI 1.16-1.96) than for subjects with low parental stress (HR 1.05, 95% CI 0.74-1.49; interaction P value 0.05). Stress also was associated with larger effects of in utero tobacco smoke. A similar pattern of increased risk of asthma was observed among children from low SES families who also were exposed to either TRP or in utero tobacco smoke. These results suggest that children from stressful households are more susceptible to the effects of TRP and in utero tobacco smoke on the development of asthma.