The present short-term longitudinal study examines the bidirectional effects among paternal-reported and maternal-reported involvement, distress and conduct-problems (CP) in children ages 7–12 years with callous-unemotional (CU) traits as a potential moderator. Latent profile analysis revealed four groups: high, moderate, decreasing, and low on CU traits. Findings suggested that children high on CU traits were at higher risk to exhibit CP and were more likely to experience low parental-involvement and high parental-distress compared to children with low, decreasing, and moderate CU traits. Findings from the cross-lagged structural equation model suggested that high levels of CP predicted increases in parenting distress, and this was shown for youth with high levels of CU traits. In turn, parental-reported distress predicted increases in CP for children in the low and decreasing CU groups. A negative bidirectional association between maternal-involvement and CP was also identified. Findings extend cross-sectional research showing parents become distressed by CP behaviors, particularly when accompanied by high CU traits.