Maladaptive offspring emotion regulation has been identified as one pathway linking maternal and child psychological well-being in school-aged children. Whether such a pathway is present earlier in life still remains unclear. The present study investigated the role of preschoolers’ emotion reactivity and regulation in the association between maternal psychological distress and child internalizing and externalizing problems. Children’s emotion reactivity and regulation were assessed through both observed behavior and physiology. At 42 months of age, children (n = 251; 128 girls) completed a fear induction task during which their heart-rate variability was assessed and their behavior was monitored, and maternal self-reports on depressive mood and anxiety were collected. At 48 months mothers and fathers reported on their children’s internalizing and externalizing problems. Higher maternal depressive mood was associated with lower child fear-related reactivity and regulation, as indexed by heart-rate variability. The latter mediated the association between higher maternal depressive mood and higher preschoolers’ externalizing problems. Overall, our findings support the role of preschoolers’ emotion reactivity and regulation in the relationship between maternal psychological distress and children’s socio-emotional difficulties. This role may also depend on the discrete emotion to which children react or seek to regulate as, here, we only assessed fear-related reactivity and regulation.