Children born to mothers with opioid use disorder (OUD) are at increased risk of maltreatment and out-of-home care (OOHC) placement. This study examines the parent-child interaction quality and home environments of 92 New Zealand children with prenatal opioid exposure (OE) and 106 non-opioid-exposed (NE) children. Experiences for those in maternal care versus OOHC were of particular interest. Biological mothers completed a lifestyle interview during late pregnancy/at birth. At 18 months, parent-child interaction observations, maternal/primary caregiver interviews, and the Home Observation for Measurement of the Environment were completed during a home visit. At age 4.5, children underwent developmental assessment. By 18 months, 20% of OE children were in OOHC. Mothers with OUD who were younger, less cooperative, and had increased polysubstance use during pregnancy were more likely to have lost custody of their child. OE children in their mother's care experienced less positive parenting and lower-quality home environments than NE children. OE children in OOHC had similarly resourced environments to NE children, yet experienced lower levels of parental warmth and responsiveness. Early parenting predicted child cognition, language, and behavior 3 years later, underscoring the critical importance of supporting the parenting and psychosocial needs of OE children's parents/caregivers to improve long-term outcomes.