The aim of this study was to assess rates of childhood disability as indicated by functional limitation of motor, sensory, or self-care skills in children living in severely-distressed neighborhoods. For a neighborhood in the US Census Track to be considered severely distressed, three of the following four characteristics need to be present: >27% of children live in poverty, >23% high school drop-out rate, >34% male unemployment rate, and >37% of households headed by females alone. In the 2000 US Census, 157 000 children between ages 5 and 15 years resided in the State of Rhode Island. Severely-distressed neighborhoods were found in 12.6% of Rhode Island Census Tracks. These areas accounted for 14.5% of the school-age population, 25% of children with motor disabilities, 29% of children with self-care disabilities, and 14% of children with sensory disabilities. For each increasing level of neighborhood distress, rates of child disability increased. Child disability rates in moderately distressed neighborhoods were 3.7%, compared with 1.1% in advantaged neighborhoods. Children in distressed neighborhoods had disproportionately high rates of disability, especially in motor and self-care functioning. Comprehensive interventions aimed at children in distressed neighborhoods are crucial to reduce health disparities for vulnerable children.