This study investigated the role of the interaction between prosocial behavior and contextual (school and neighborhood) risk in children’s trajectories of externalizing and internalizing problems at ages 3, 5, and 7. The sample was 9,850 Millennium Cohort Study families who lived in England when the cohort children were aged 3. Neighborhood context was captured by the proportion of subsidized (social rented) housing in the neighborhood and school context by school-level achievement. Even after adjustment for child- and family-level covariates, prosocial behavior was related both to lower levels of problem behavior at school entry and to its trajectory before and after. Neighborhood social housing was related to the trajectory of problem behavior, and school-level achievement to lower levels of problem behavior at school entry. The negative association between prosocial and problem behavior was stronger for children attending low-performing schools or living in disadvantaged neighborhoods. The adverse ‘effect’ of low prosocial behavior, associated with low empathy and guilt and with constricted emotionality, on internalizing and externalizing problems appears to be exacerbated in high-risk contexts.