Existing studies of child care have not been able to determine whether higher quality child care protects children from the effects of poverty, whether poverty and lower quality child care operate as dual risk factors, or whether both are true. The objective of the current study was to test two pathways through which child care may serve as a naturally occurring intervention for low-income children: a direct pathway through child care quality to child outcomes, and an indirect pathway through improvements in the home environment. Children were observed in their homes and child care settings at 6, 15, 24, and 36 months. An interaction between family income-to-needs ratio and child care quality predicted School Readiness, Receptive Language, and Expressive Language, as well as improvements in the home environment. Children from low-income families profited from observed learning supports in the form of sensitive care and stimulation of cognitive development, and their parents profited from unobserved informal and formal parent supports. Policy implications are discussed.