The Longitudinal Study of Australian Children (LSAC) is a major national study examining the lives of Australian children, using a cross-sequential cohort design and data from parents, children, and teachers for 5,107 infants (3–19 months) and 4,983 children (4–5 years). Its data are publicly accessible and are used by researchers from many disciplinary backgrounds. It contains multiple measures of children’s developmental outcomes as well as a broad range of information on the contexts of their lives. This paper reports on the development of summary outcome indices of child development using the LSAC data. The indices were developed to fill the need for indicators suitable for use by diverse data users in order to guide government policy and interventions which support young children’s optimal development. The concepts underpinning the indices and the methods of their development are presented. Two outcome indices (infant and child) were developed, each consisting of three domains—health and physical development, social and emotional functioning, and learning competency. A total of 16 measures are used to make up these three domains in the Outcome Index for the Child Cohort and six measures for the Infant Cohort. These measures are described and evidence supporting the structure of the domains and their underlying latent constructs is provided for both cohorts. The factorial structure of the Outcome Index is adequate for both cohorts, but was stronger for the child than infant cohort. It is concluded that the LSAC Outcome Index is a parsimonious measure representing the major components of development which is suitable for non-specialist data users. A companion paper (Sanson et al. 2010) presents evidence of the validity of the Index.