Development in early childhood predicts schooling and labor market outcomes in adulthood. Many young children are in some form of non-parental child care, but the quality of this care, in particular the quality of caregiver-child interactions, is often low. In this paper, we use data from Peru to show that infants and toddlers with caregivers who demonstrate higher-quality interactions have significantly better communication, problem-solving and fine motor skills. We also find evidence that the association between the quality of care and child outcomes is significant throughout most of the distribution of child development, and largest at the bottom of it. (author abstract)