Review of the literature on the psychological effects of hospitalization on children reveals that it has not increased substantially in quality or quantity since Vernon and his associates published their extensive review a decade ago. More recent research supports the earlier contentions that children between the ages of 6 months and 4 years are especially vulnerable to upset but are also more amenable to change and growth than other age groups. Maternal separation appears to be the primary stressor, but the presence of emotional disturbance prior to hospitalization and the child's level of cognitive development at the time may also be significant factors. Attempts to prepare children for hospitalization and surgery have met with some success, but not for preschool children. The need for some comprehensive theoretical perspective on which to base research is evident. Studies to date appear to have been based either on the concept of "anticipatory worry" or on some form of modeling theory. The author suggests that hospitalization can be considered as a life crisis for a child, a crisis that may result in blocks or distortions in his development if not mastered properly. Crisis theory provides a meaningful and useful model for understanding the experience of hospitalization for young children and for providing a basis for intervention. The psychopathology present in some children and their families is made apparent during such a crisis as hospitalization; this may present the only time when they are accesible to mental health professionals.