Parents' beliefs about children's abilities shape their parenting practices. But how accurate are parents at estimating what children are truly capable of? Here, we test the hypothesis that U.S. parents underestimate young children's abilities to complete challenging, multi-step tasks, and in turn, intervene beyond children's developmental needs (a behavior known as "overparenting"). In Studies 1A and 1B, parents (N = 130) of preschool-aged children underestimated their children's abilities, especially on practical (vs. academic) and novel (vs. familiar) multi-step tasks. In Studies 2A and 2B, we found that parents' (N = 109) underestimation has potential negative consequences: Parents who believed their child was less capable were more likely to take over tasks and provided less encouragement for independent actions. These findings suggest that parents underestimate young children's abilities, which may hinder the development of children's learning and autonomy.