Research has documented various family and individual risk factors associated with severe conduct problems, but little is known about the developmental origins of children who engage in both aggressive and prosocial interactions with others. The present study utilized growth-mixture modeling to identify distinct trajectories of physical aggression and prosocial behavior across the preschool years in a large (n = 424), diverse (42% immigrant) Canadian sample. Parent ratings of aggression and prosocial behavior were assessed at ages 3, 4.5, and 6 years. Observed mother-child interactions and mother-reported child exposure to interparental conflict were measured at 1.5 and 3 years. Children's psychological functioning (language ability, academic achievement, theory of mind understanding) was assessed at ages 3 and 4.5. Four trajectory classes emerged. Most children (74%) showed low/moderate-declining aggression and high/moderate-increasing prosocial behavior (prosocial and desisting classes), whereas a minority (7%) were highly aggressive and relatively low in prosocial behavior (chronic aggressive class). The remaining 19% of children exhibited low-increasing aggression and moderate-stable prosocial behavior (escalating class). Increased exposure to interparental conflict between 1.5 and 3 years uniquely predicted membership in the escalating compared with the prosocial group, whereas prosocial and escalating children did not differ in positive parent-child interactions in toddlerhood. Children in the escalating class demonstrated typical psychological functioning relative to prosocial children, and both outperformed chronically aggressive youth. These findings highlight the need to move beyond a singular deficit-model to consider alternative pathways by which socially skilled children may develop aggressive tendencies. (PsycINFO Database Record (c) 2019 APA, all rights reserved).