Families living with the burdens of poverty-related stress are at risk for developing a range of psychopathology. The present study examines the year-long prospective relationships among poverty-related stress, involuntary engagement stress response (IESR) levels, and anxiety symptoms and aggression in an ethnically diverse sample of 98 families (300 individual family members) living at or below 150% of the US federal poverty line. Hierarchical Linear Modeling (HLM) moderator model analyses provided strong evidence that IESR levels moderated the influence of poverty-related stress on anxiety symptoms and provided mixed evidence for the same interaction effect on aggression. Higher IESR levels, a proxy for physiological stress reactivity, worsened the impact of stress on symptoms. Understanding how poverty-related stress and involuntary stress responses affect psychological functioning has implications for efforts to prevent or reduce psychopathology, particularly anxiety, among individuals and families living in poverty.