Research conducted primarily over the past 5-8 years on the psychosocial effects of pediatric chronic physical disorders on children and their families is reviewed. A large body of studies show that both children and their mothers, as groups, are at increased risk for psychosocial adjustment problems compared to peers, but that there is considerable individual variation in outcome. Since the last review on this topic (Eiser, 1990a), many studies have been conducted to identify risk and resistance factors associated with differences in adjustment among these children and their mothers. Improvements are noted in the theoretical basis for this work, programmatic nature of some of the research, and efforts at producing clinically relevant information. Evaluations of interventions, however, are lagging. Critical issues and future directions regarding developmental approaches, theory, method, measurement, and intervention are discussed.