The development of structured diagnostic instruments has been an important step for research in child and adolescent psychiatry, but the adequacy of a diagnostic instrument in a given culture does not guarantee its reliability or validity in another population. The objective of the study was to describe the process of cross-cultural adaptation into Icelandic of the Schedule for Affective Disorders and Schizophrenia for School-Age Children-Present and Lifetime Version (Kiddie-SADS-PL) and to test the inter-rater reliability of the adapted version. To attain cross-cultural equivalency, five important dimensions were addressed: semantic, technical, content, criterion and conceptual. The adapted Icelandic version was introduced into an inpatient clinical setting, and inter-rater reliability was estimated both at the symptom and diagnoses level, for the most frequent diagnostic categories in both international diagnostic classification systems (DSM-IV and ICD-10). The cross-cultural adaptation has provided an Icelandic version allowing similar understanding among different raters and has achieved acceptable cross-cultural equivalence. This initial study confirmed the quality of the translation and adaptation of Kiddie-SADS-PL and constitutes the first step of a larger validation study of the Icelandic version of the instrument.