Research Findings: The study examined the development of children's social-emotional problems between 2019 (T1) and winter 2021/22 (T2) during the COVID-19 pandemic, as well as the role of children's home and preschool learning environments. The sample included 228 German children ages 3-7 years at T1 (M[subscript Age] = 5.13, SD = 0.79, 46% female). Results showed an increase in emotional problems between T1 and T2, which was more pronounced among already disadvantaged groups of children from families with lower income and lower educational background. Peer problems increased only among children from families with lower educational backgrounds. The emotional climate of the family and the quality of children's preschool learning environment were identified as protective influences for the development of children's peer problems, but not for children's emotional problems. Practice or Policy: The policy restrictions implemented to slow the spread of the COVID-19 virus had longer-lasting consequences for (some) children's emotional functioning. Efforts should be undertaken to mitigate such detrimental effects by supporting disadvantaged groups of children. In addition, based on the findings regarding the importance of high-quality interactions to prevent the development of social problems among children, policy should establish the conditions for preschool staff to provide high-quality interactions in childcare.