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To investigate the effects of child–caregiver ratio on the quality of caregiver–child interaction in child‐care centers, 217 caregivers (ages 18–56 years) from 64 child care centers were observed during two structured play episodes: one with a group of three children and one with a group of 5 children. As predicted, a child–caregiver ratio of 3:1 produced a significantly higher quality of caregiver–child interaction than a ratio of 5:1 and particularly for younger children. Significant and meaningful effects were found for both the interactive behaviors of the caregivers and the children's well‐being and cooperation. Significant correlations with caregiver–child interaction during lunchtime and throughout the remainder of the morning confirmed the ecological validity of the caregiver–child interactions observed during structured play episodes.