Little is known about how to assist children with chronic conditions and their families cope with repeated hospitalizations. A two-group, pretest-posttest study was done to determine whether a community-based, stress-point nursing intervention for parents could decrease distress and improve child and family functioning. Fifty participants were randomly assigned to intervention or usual care control groups. The intervention focused on specific, parent-verified child and family issues. Three months after hospitalization, intervention parents had better coping and family functioning than those in the usual care group. Intervention parents' anxiety was initially higher and then lower. There were no child behavior differences between the groups after hospitalization. Intervention children had no developmental regression at 2 weeks and better developmental gains 3 months after discharge than the usual care children. Stress-point intervention for families and their children with chronic conditions improved family coping and functioning, and eliminated hospitalization-induced developmental regression.