Objective: To examine the incidence and reverse of obesity among young low-income children and variations across population subgroups., Methods: We included 1.2 million participants in federally funded child health and nutrition programs who were 0 to 23 months old in 2008 and were followed up 24 to 35 months later in 2010-2011. Weight and height were measured. Obesity at baseline was defined as gender-specific weight-for-length ≥95th percentile on the 2000 Centers for Disease Control and Prevention growth charts. Obesity at follow-up was defined as gender-specific BMI-for-age ≥95th percentile. We used a multivariable log-binomial model to estimate relative risk of obesity adjusting for gender, baseline age, race/ethnicity, duration of follow-up, and baseline weight-for-length percentile., Results: The incidence of obesity was 11.0% after the follow-up period. The incidence was significantly higher among boys versus girls and higher among children aged 0 to 11 months at baseline versus those older. Compared with non-Hispanic whites, the risk of obesity was 35% higher among Hispanics and 49% higher among American Indians (AIs)/Alaska Natives (ANs), but 8% lower among non-Hispanic African Americans. Among children who were obese at baseline, 36.5% remained obese and 63.5% were nonobese at follow-up. The proportion of reversing of obesity was significantly lower among Hispanics and AIs/ANs than that among other racial/ethnic groups., Conclusions: The high incidence underscores the importance of early-life obesity prevention in multiple settings for low-income children and their families. The variations within population subgroups suggest that culturally appropriate intervention efforts should be focused on Hispanics and AIs/ANs.