Often undetected and poorly managed, maternal depression and child adjustment problems are common health problems and impose significant burden to society. Studies show evidence of mutual influences on maternal and child functioning, whereby depression in mothers increases risk of emotional and behavioral problems in children and vice versa. Biological mechanisms (genetics, in utero environment) mediate influences from mother to child, while psychosocial (attachment, child discipline, modeling, family functioning) and social capital (social resources, social support) mechanisms mediate transactional influences on maternal depression and child adjustment problems. Mutual family influences in the etiology and maintenance of psychological problems advance our understanding of pathways of risk and resilience and their implications for clinical interventions. This article explores the dynamic interplay of maternal and child distress and provides evidence for a biopsychosocial model of mediating factors with the aim of stimulating further research and contributing to more inclusive therapies for families.