Effortful control has been demonstrated to have important ramifications for children's self-regulation and social-emotional adjustment. However, there are wide socioeconomic disparities in children's effortful control, with impoverished children displaying heightened difficulties. The current study was designed to demonstrate how instability within the proximal rearing context of young children may serve as a key operant on the development of children's effortful control in the context of poverty. Two separate studies were conducted that included samples of children living within homes characterized by heightened economic risk. In Study 1, we tested the differential prediction of family instability on two domains of children's effortful control: cool effortful control and delay control. Consistent with hypotheses, elevated instability was associated with decreased hot effortful control but not cool effortful control over the span of 2 years. In Study 2, we examined how children's basal cortisol activity may account for associations between heightened instability and effortful control in reward tasks. The results were consistent with sensitization models, suggesting that elevated cortisol activity arising from increased uncertainty and unpredictability in rearing contexts may influence children's hot effortful control. The findings are interpreted within emerging evolutionary-developmental frameworks of child development.