The study examines how dual‐ethnic and single‐ethnic families differ in terms of children's psychological adjustment and its correlates. Among 48 Finnish–Russian and Finnish families, mothers and fathers reported on children's emotional and conduct problems at ages 4 years and 7 years and children's emotion regulation, emotionality, and their own socialization values at 7 years. Mother–infant and father–infant coregulation was assessed at 7 months. The results show that children had more emotional problems among Finnish–Russian families than among Finnish families at 4 years but not at 7 years. Russian mothers reported more hierarchical and authoritarian values than did Finnish mothers, but the values did not moderate between ethnic context and children's adjustment. Equally many Finnish and Finnish–Russian families had balanced early coregulation, which was linked with fewer attention‐related problems at age 4. In both ethnic contexts, children's emotion regulation was concurrently associated with better psychological adjustment, and high emotionality was associated with more problems. Parental values were not associated with children's adjustment.