Background: Animal studies have shown that postnatal rearing style can modify the association between prenatal stress exposure and offspring neurodevelopmental outcomes. However, little is known about how parenting quality impacts the association between maternal prenatal anxiety and development in human infants. Aim: This prospective study examined the impact of maternal prenatal anxiety disorder and maternal caregiving sensitivity on cognitive and psychomotor development in healthy, full-term, 7-month-old infants. Measures: Women completed a clinical interview during the third trimester of pregnancy to assess anxiety symptoms meeting DSM-IV diagnostic criteria. At infant age 7. months, maternal sensitivity to infant distress and non-distress were observed and coded during the still-face procedure. Maternal postnatal (concurrent) anxiety and depression were also assessed at this time. Infant mental and psychomotor development was assessed at infant age 7. months using the Bayley Scales of Infant Development II. Results: Analyses were based on 77 mother-infant dyads. Maternal sensitivity to infant distress moderated the association between maternal prenatal anxiety disorder and infant mental development, F (1, 77)=5.70, p=.02. Whereas there was a significant positive association between sensitivity and mental development among infants whose mothers were anxious during pregnancy, sensitivity had little impact on mental development among infants of control (non-anxious) women. Results were independent of prenatal depression and postnatal anxiety and depression. A caregiving moderation effect was not found for infant psychomotor development, p>.10. Conclusions: These findings are consistent with a cumulative risk model suggesting that maternal prenatal anxiety and quality of maternal care act in concert to shape infant outcomes.