This study examined sensitive parenting as a protective factor in relations between interparental violence (IPV) and children's coping and psychological adjustment. Using a multimethod approach, a high-risk sample of 201 two-year-olds and their mothers participated in three annual waves of data collection. Moderator analyses revealed that sensitive parenting buffered the risk posed by IPV on children's changes in externalizing and prosocial development over a 2-year period. Tests of mediated moderation further indicated that sensitive parenting protected children from the vulnerability of growing up in a violent home through its association with lower levels of children's angry reactivity to interparental conflict. Results highlight the significance of identifying the mechanisms that mediate protective factors in models of family adversity.