Background Few studies have examined the association between the food environment and adiposity in early childhood, a critical time for obesity prevention. The objective of this study was to examine the longitudinal association between neighbourhood food environment and adiposity among low-income preschool-aged children in a major metropolitan region in the USA. Methods The study sample was 32 172 low-income preschool-aged children in Los Angeles County who had repeated weight and height measurements collected between ages 2 and 5 years through a federal nutrition assistance programme. We conducted multilevel longitudinal analyses to examine how spatial densities of healthy and unhealthy retail food outlets in the children's neighbourhoods were related to adiposity, as measured by weight-for-height z-score (WHZ), while controlling for neighbourhood-level income and education, family income, maternal education, and child's gender and race/ethnicity. Results Density of healthy food outlets was associated with mean WHZ at age 3 in a non-linear fashion, with mean WHZ being lowest for those exposed to approximately 0.7 healthy food outlets per square mile and higher for lesser and greater densities. Density of unhealthy food outlets was not associated with child WHZ. Conclusions We found a non-linear relationship between WHZ and density of healthy food outlets. Research aiming to understand the sociobehavioural mechanisms by which the retail food environment influences early childhood obesity development is complex and must consider contextual settings. © 2014 by the BMJ Publishing Group Ltd.