This study aimed to investigate the direct and indirect effects of environmental pollutants on child development and parental concerns. It focused on the pathway relationships among the following factors: living within three kilometers of an incinerator, breastfeeding, place of residence, parental concerns about development, and parent-perceived child development. The Taiwan Birth Cohort Study (TBCS) dataset includes randomized community data on 21,248 children at six, 18, and 36 months of age. The Parental Concern Checklist and the Taiwan Birth Cohort Study-Developmental Instrument were used to measure parental concern and parent-perceived child development. Living within three kilometers of an incinerator increased the risk of children showing delayed development in the gross motor domain at six and 36 months. Although breastfeeding is a protective factor against uneven/delayed developmental disability (U/DDD), children living near an incinerator who were breastfed had an increased risk of U/DDD compared with those who did not live near incinerators. The presence of a local incinerator affected parent-perceived child development directly and indirectly through the mediating factor of breastfeeding. Further follow-up of these children to investigate the long-term effects of specific toxins on their development and later diagnostic categorization is necessary.