Summary Background Dysregulation of the hypothalamic–pituitary–adrenal (HPA) axis has been observed in adults and children with mood and anxiety disorders and is thought to be involved in the pathogenesis of these disorders. We recently studied a diverse community sample of boys and found associations of behavioral problems, including symptoms of depression and anxiety, with basal and stress-induced cortisol concentrations. Here we examine cortisol–emotional/behavioral associations at a two-year follow-up and test whether initial cortisol is predictive of worsening emotional/behavioral problems two years later. Method Seventy-eight 10–14-year-old boys and their mothers completed a battery of psychosocial assessments, provided morning and afternoon saliva samples, and participated in a home visit involving mildly stressful tasks and saliva collection for cortisol assay during a two-year follow-up assessment. Results Consistent with the findings from our time 1 assessment, greater declines in cortisol across the home-visit challenge task were significantly associated with internalizing and externalizing behaviors as well as attention problems and social problems at the two-year follow-up. In addition, morning and afternoon cortisol concentrations at the initial assessment were significant positive predictors of the later development of child depressive symptoms at follow-up after controlling for initial depressive symptoms. Conclusion These findings demonstrate that children in the community with internalizing and externalizing behavior problems have altered patterns of HPA axis stress reactivity. In addition, our prospective findings suggest that elevated cortisol concentrations may influence the later development of emotional/behavioral problems in boys.