Little is known about how patients undergoing hematopoietic stem cell transplantation (HCT) and their family caregivers (FC) perceive their prognosis. We examined prognostic understanding in patients undergoing HCT and their FC and its relationship with quality of life (QOL) and mood. We conducted a longitudinal study of patients (and FC) hospitalized for HCT. We used a questionnaire to measure participants' prognostic understanding and asked the oncologists to estimate patients' prognosis prior to HCT. We assessed QOL and mood weekly and evaluated the relationship between prognostic understanding, and QOL and mood using multivariable linear mixed models. We enrolled 90 patients undergoing (autologous (n=30), myeloablative (n=30) or reduced intensity allogeneic (n=30)) HCT. About 88.9% of patients and 87.1% of FC reported it is 'extremely' or 'very' important to know about prognosis. However, 77.6% of patients and 71.7% of FC reported a discordance and more optimistic prognostic perception compared to the oncologist (P<0.0001). Patients with a concordant prognostic understanding with their oncologists reported worse QOL (β=-9.4, P=0.01) and greater depression at baseline (β=1.7, P=0.02) and over time ((β=1.2, P<0.0001). Therefore, Interventions are needed to improve prognostic understanding, while providing patients with adequate psychological support.