Family-centred care (FCC) is a key factor in increasing health and related system responsiveness to the needs of children and families; unfortunately, it is an unfamiliar service model in children's mental health. This critical review of the literature addresses three key questions: What are the concepts, characteristics and principles of FCC in the context of delivering mental health services to children? What are the enablers, barriers and demonstrated benefits to using a family-centred approach to care in children's mental health? And how can we facilitate moving an FCC model forward in children's mental health? A range of databases was searched for the years 2000–2011, for children ages zero to 18 years. Articles were selected for inclusion if a family-centred approach to care was articulated and the context was the intervention and treatment side of the mental healthcare system. This literature review uncovered a multiplicity of terms and concepts, all closely related to FCC. Two of the most frequently used terms in children's mental health are family centred and family focused, which have important differences, particularly in regard to how the family is viewed. Initial benefits to FCC include improved child and family management skills and function, an increased stability of living situation, improved cost-effectiveness, increased consumer and family satisfaction and improved child and family health and well-being. Significant challenges exist in evaluating FCC because of varying interpretations of its core concepts and applications. Nonetheless, a shared understanding of FCC in a children's mental health context seems possible, and examples can be found of best practices, enablers and strategies, including opportunities for innovative policy change to overcome barriers.