Background: Grandparents are increasingly involved in the care of young children, but little is known about factors associated with this type of care, or its implications for children’s behavioural development. Methods: We used information collected from 8752 families in the Avon Longitudinal Study of Parents and Children (ALSPAC) on grandparent involvement when the study children were aged 8, 15 and 24 months; potential maternal and family predictors of grandparent care; and behavioural outcomes at age 4 years. Results: Forty-four percent of children were regularly cared for by grandparents at each age. Throughout the sample, key correlates of grandparent care were maternal age and education. In families without access to paid help with childcare, the child’s ordinal position, maternal employment, the mother’s recall of parenting by her own mother and the reasons for choosing the type of childcare were also associated with variations in grandparent care. Grandparent care was associated with some elevated rates of hyperactivity and peer difficulties at age 4, but these were largely attributable to variations in the types of families using grandparent care. Conclusions: The popular belief that the extended family is no longer an important part of British life is not borne out by this study. Grandparents played a significant role in the care of their young grandchildren. The modest behavioural sequelae of extensive grandparental care differ from those reported for group-based day care.