Your wonderfully curious toddler has acquired a new skill, one that's different and therefore exciting. Many times, a child's first swear word will be the result of direct mimicry; maybe she heard you say it when another driver cut you off in traffic, and now she's repeating it endlessly in the back seat. The best way to deal with this is to ignore it until your child loses interest. If she keeps it up, admit that you shouldn't have said the bad word (a simple "oops" will do), and distract her with a song or story. But she also may have developed potty mouth because of what she's hearing out in the world. Maybe her best preschool buddy has just expanded his vocabulary and thought it fun to share a few choice words with your child, or perhaps she's inadvertently caught a few episodes of a television series that uses crude language.
Keep a poker face. The first time your toddler says a swear word or makes a scatological reference, restrain your urge to laugh out loud, which your child would of course take as wonderful reinforcement for doing it again. In almost every case, you're watching a thoughtful experiment on your child's part: Here's something I heard, which people seem to say with a certain level of intensity. Let's see what happens when I say it. Making adults laugh — or angry or upset — is an enormous power to possess when you're very small. And even if it's entertaining to hear your child combine two different words (such as "poopynose"), it's not really in her best interest for you to show your amusement. So when your child first experiments with swearing and potty talk, remember this: No response is the best response.
Set limits. If your 2-year-old seems to have latched on to a serious profanity or two, she needs you to set some guidelines. It's crucial to do this calmly — without becoming agitated or mad — otherwise, each time you blow up, you're just reminding her how much power she has to make you pay attention to her quickly. If it's a made-up word (such as "wee-wee-face"), tell her there's no such thing and that you don't understand what she's saying because she doesn't make sense. For adult-variety swear words, you don't have to explain what they mean or why they're unacceptable. Just make it clear, in a matter-of-fact and disinterested voice, which words are off-limits: "That's not a word you may use in our house or around other people." ("We don't allow that kind of language" is going to seem too vague to a very young child.)
Substitute fun but clean alternatives. If your child is just trying a new word on for size or singsonging it under her breath for the thrill, chances are you can persuade her to substitute another exciting new word (try "abracadabra" or "shazzam") or a nursery rhyme. ("Rain, rain, go away" may do the trick.) If the problem is that, like many adults, she's short on alternative words to express intense anger or frustration, it may help to encourage her to say loudly, "I'm mad" or "I'm frustrated." (The word "frustrated" is multi-syllabic, but little kids get the meaning at once.) Some families invent amusing private epithets of their own (they may say, "Oh, shoes").
But if she won't let go of the swear word even after a warning or two, then it's time for disciplinary tactics. Stay calm, respond swiftly, and be consistent: "That word gets you a time-out by yourself." (A time-out at this age should be very short and can be orchestrated anywhere: the back seat of the car, a boring chair at the mall, the back room at Grandma's.)
Don't let swearing get results.If your child is cursing because she wants something, make sure she doesn't get whatever it is she's asking for. It isn't good enough to say, "That was terrible language to use, but here's your ice cream cone anyway."
Teach respect. You're not doing your child any favors by letting her think it's okay to hurl even baby-variety epithets at other kids. (How would you like to be addressed as "farthead"?) Swear words and bathroom talk will get her in trouble at school, on the playground, and at friends' houses — and won't do her much good at Grandpa's dinner table, either. Explain that it hurts people's feelings to be called names, that it makes no difference if other children are using the same language, and that name-calling and hurting people's feelings are not allowed. She may still be working on learning how to be empathetic, and may not always remember to think of others first, but she still needs to know when she's being hurtful, even if she's not doing it on purpose.
Watch your own mouth. Sure, there are different rules for adults' and children's behavior, but if your toddler hears profanity dropped into daily conversation, it's going to be a lot harder to convince her that certain words are unacceptable. She's also going to wonder why a rule applies to her and not to you. Think of your toddler as a sponge: She soaks up what she sees and hears around her and is eager to share what she's learned with others, good and bad.