Examined a cognitive-behavioral pathway by which depressive symptoms in mothers and fathers increase risk for later child externalizing problem behavior via parents' appraisals of child behavior and physical discipline. Participants were 245 children (118 girls) at risk for school-age conduct problems, and their parents and teachers. Children were approximately 3 years old at Time 1 (T1) and 5 ½ years old at Time 2 (T2). At T1, mothers and fathers reported their depressive symptoms, perceptions of their child's reciprocal affection and responsiveness, frequency of physical punishment, and child externalizing problems. Mothers, fathers, and teachers provided ratings of externalizing behavior at T2. Structural equation modeling revealed that parents' negative attributions mediated positive relations between their depressive symptoms and frequency of physical punishment for both fathers and mothers. More frequent physical punishment, in turn, predicted increased child externalizing behavior at T2. In future research, transactional mechanisms underlying effects of clinical depression on child conduct problems should be explored at multiple stages of development. For parents showing depressive symptoms, restructuring distorted perceptions about their children's behavior may be an important component of intervention programs.