Studies have reported mixed findings regarding the effects of mother-infant interaction and maternal distress on children's negative emotional reactivity. In the current study (N = 134 and 107), we examined the effects of maternal Emotional Availability (sensitivity, structuring, non-intrusiveness and non-hostility) and maternal psychological distress on negative reactivity among children in the FinnBrain birth cohort study. In addition, the possible moderating effect of mother-infant interaction on the associations between maternal psychological distress and children's negative reactivity was examined. We used questionnaires to asses maternal psychological distress, observations of mother-infant interaction and observations as well maternal reports of child temperament to overcome the key limitations of many studies relying on single-method assessments. Our results showed that higher maternal sensitivity and structuring at 8 months of child's age were associated with lower mother-reported negative reactivity among children at 24 months. Higher maternal postnatal distress associated with higher parent-reported negative reactivity in children at 12 and 24 months of age when the effects of prenatal distress and the quality of mother-infant interaction were controlled for. Mother-infant interaction and maternal psychological distress did not associate with observations of child negative reactivity. We found no moderation effects of mother-infant interaction regarding the associations between maternal distress and children's negative emotional reactivity. Our findings reflect the importance of developing interventions to reduce the maternal distress symptoms while enhancing maternal sensitivity and structuring to prevent the possible harmful effects of these on child negative reactivity.