BACKGROUND: There is evidence that poverty, health and nutrition affect children's cognitive development. This study aimed to examine the relative contributions of both proximal and distal risk factors on child cognitive development, by breaking down the possible causal pathways through which poverty affects cognition. METHODS: This cohort study collected data on family socioeconomic status, household and neighbourhood environmental conditions, child health and nutritional status, psychosocial stimulation and nursery school attendance. The effect of these on Wechsler Pre-School and Primary Scale of Intelligence scores at five years of age was investigated using a multivariable hierarchical analysis, guided by the proposed conceptual framework. RESULTS: Unfavourable socioeconomic conditions, poorly educated mother, absent father, poor sanitary conditions at home and in the neighbourhood and low birth weight were negatively associated with cognitive performance at five years of age, while strong positive associations were found with high levels of domestic stimulation and nursery school attendance. CONCLUSION: Children's cognitive development in urban contexts in developing countries could be substantially increased by interventions promoting early psychosocial stimulation and preschool experience, together with efforts to prevent low birth weight and promote adequate nutritional status.