Contextual stress has been associated with poor school readiness skills during early childhood. This study evaluated mechanisms by which parent’s exposure to poverty-related contextual stressors influence the acquisition of school readiness skills from child age 2 to 4 among 167 parent-child dyads. Parent report of contextual stress and observational measures of parenting quality were collected during the children’s 2-year-old assessment. Teacher reports and children’s scores on school readiness tasks were collected during the 4-year-old assessment. Two approaches were used to understand the process by which contextual stressors influences school readiness; the accumulation of stressors approach and the constellations of stressors approach. Using the accumulation of stressors approach, each indicator of contextual stress was identified as a stressor or non-stressor and the number of categories in which families experienced a stressor were summed. Results from separate structural equation models (SEM) indicated that the accumulation of stressors did not influence school readiness skills by way of positive parenting. The constellation of stressors approach considered how clusters of stressors may differentially impact children’s school readiness. Results of the Latent Class Analysis (LCA) revealed the presence of two risk profile groups that differed qualitatively, indicating that not all stressors are equal; the “low-stressor” group and the “multi-stressor” group. The multi-stressor group represented thirty-three percent of families (n= 55). When considering the influence of the multi-stressor group probability to each of the school readiness indicators, none of the path coefficients were statistically significant. Implications for research and intervention are discussed.