The intergenerational transmission of psychopathology is one of the strongest known risk factors for childhood disorder and may be a malleable target for prevention and intervention. Anxious parents have distinct parenting profiles that impact socioemotional development, and these parenting effects may result in broad alterations to the biological and cognitive functioning of their children. Better understanding the functional mechanisms by which parental risk is passed on to children can provide (1) novel markers of risk for socioemotional difficulties, (2) specific targets for intervention, and (3) behavioral and biological indices of treatment response. We propose a developmental model in which dyadic social dynamics serve as a key conduit in parent-to-child transmission of anxiety. Dyadic social dynamics capture the moment-to-moment interactions between parent and child that occur on a daily basis. In shaping the developmental trajectory from familial risk to actual symptoms, dyadic processes act on mechanisms of risk that are evident prior to, and in the absence of, any eventual disorder onset. First, we discuss dyadic synchrony or the moment-to-moment coordination between parent and child within different levels of analysis, including neural, autonomic, behavioral, and emotional processes. Second, we discuss how overt emotion modeling of distress is observed and internalized by children and later reflected in their own behavior. Thus, unlike synchrony, this is a more sequential process that cuts across levels of analysis. We also discuss maladaptive cognitive and affective processing that is often evident with increases in child anxiety symptoms. Finally, we discuss additional moderators (e.g., parent sex, child fearful temperament) that may impact dyadic processes. Our model is proposed as a conceptual framework for testing hypotheses regarding dynamic processes that may ultimately guide novel treatment approaches aimed at intervening on dyadically linked biobehavioral mechanisms before symptom onset.