Little is known about the holistic development of children who are not healthy-weight when they start school, despite one fifth of preschool-aged children in high income countries being overweight or obese. Further to this, there is a paucity of research examining low body mass index (BMI) in contemporary high-income populations, although evidence from the developing world demonstrates a range of negative consequences in childhood and beyond. We investigated the development of 4-6 year old children who were thin, healthy-weight, overweight, or obese (as defined by BMI z-scores) across the five domains of the Australian Early Development Census (AEDC): Physical Health and Wellbeing, Social Competence, Emotional Maturity, Language and Cognitive Skills, and Communication Skills and General Knowledge. We used a linked dataset of South Australian routinely collected data, which included the AEDC, school enrollment data, and perinatal records (n = 7533). We found that the risk of developmental vulnerability among children who were thin did not differ from healthy-weight children, after adjusting for a range of perinatal and socio-economic characteristics. On the whole, overweight children also had similar outcomes as their healthy-weight peers, though they may have better Language and Cognitive skills (adjusted Risk Ratio [aRR] = 0.73 [95% CI 0.50-1.05]). Obese children were more likely to be vulnerable on the Physical Health and Wellbeing (2.20 [1.69, 2.87]) and Social Competence (1.31 [0.94, 1.83]) domains, and to be vulnerable on one or more domains (1.45 [1.18, 1.78]). We conclude that children who are obese in the first year of school may already be exhibiting some developmental vulnerabilities (relative to their healthy-weight peers), lending further support for strategies to promote healthy development of preschoolers.