We propose a new theory of the demographic transition based on the evidence from natural sciences that physical development during childhood affects adult life expectancy positively. This theory is embodied in a continuous time OLG framework where fertility, longevity and education all result from individual decisions. We conclude that a sustained improvement in physical development is at the basis of the observed demographic transition in today’s developed countries and may be an important factor in explaining the slow transition from the Malthusian towards the Modern era. The dynamics of the proposed model reproduce the key features of the demographic transition, including sustained improvements in child physical development, permanent increase in life expectancy, a hump-shaped evolution of both population growth and fertility and late increases in secondary educational attainments.