A major justification of extended indications for GH therapy in conditions with short stature is based on the objective of preventing or alleviating suspected psychosocial maladjustment. Despite more sophisticated research, results are still controversial concerning the actual seriousness of adjustment difficulties in various conditions with short stature, thus making it difficult to determine a patient's need for treatment. This paper discusses different concepts and assessment strategies of "adjustment" as a major source of the apparent heterogeneity among study findings, conclusions and treatment recommendations. A concise framework is developed that identifies and differentiates three hierarchical levels of research on adjustment in conditions with growth retardation: (1) stress exposure due to short stature, (2) quality of coping responses, and (3) occurrence of psychopathology. Choosing a particular research level and its corresponding measures may imply whether a high, medium or very low impact of short stature on adjustment is found, and the need for treatment that is inferred. The integration of these different research approaches within an integrative model may help to resolve apparent inconsistencies among empirical studies and reveal sources of confoundation due to other, short stature independent risk factors associated with the particular underlying growth disorder. The key terms of the suggested model are transformed into a clinical guideline for psychological assessment in patients with growth retardation and into three key criteria for the decision making process on extended indications for GH treatment with respect to the improvement of psychosocial adjustment.