This paper investigates the association between obesity and skill attainment in early childhood (aged 2-4 years). Data from the German Socio-Economic Panel Study are used to estimate models of developmental functioning in four critical areas (verbal skills, activities of daily living, motor skills, and social skills) as a function of various measures of weight (including body mass index and obesity) controlling for a rich set of child, parent, and family characteristics. The findings indicate that, among boys, obesity is associated with reduced verbal skills, social skills, motor skills, and activities of daily living. Among girls, obesity is associated with reduced verbal skills. Further investigations show that the correlations exist even for those preschool children who spend no time in day care, which implies that it cannot be due solely to discrimination by teachers, classmates, or day care providers.