There is evidence that children of incarcerated parents are at risk of poor developmental and educational outcomes. However, much of this evidence is limited by biased samples, as studies must rely on opt-in recruitment. Administrative data present an opportunity to overcome this challenge, as they capture information on all incarcerated individuals. This study used administrative data on convictions of the parents of 19,071 children aged 5–6 years in Western Australia. Records of parental convictions (starting from 1 year prior to the child’s birth) were linked to children’s scores on the Australian Early Development Census, which is a teacher-reported measure of children’s physical, social, emotional, communicative, and cognitive development. Logistic regression models estimated the odds of children of convicted parents being developmentally vulnerable. Models were adjusted for child, parent, and neighborhood sociodemographic factors. Compared to children in the comparison group, children whose parent had either served a community order or been incarcerated were at risk of poor development across all developmental domains, even after adjusting for sociodemographic factors. Furthermore, children of incarcerated parents had higher odds of developmental vulnerability on multiple domains compared to children of parents who had served community orders only. The results suggest that, although children of convicted parents experience a higher incidence of sociodemographic risk, their parents’ criminal activity constitutes an independent risk factor for their development. Intervention to support the early development of children of convicted parents is therefore essential, and should consider the family context.