There have been limited studies of the validation of actigraphy for the determination of sleep and wake in children and in this study we aimed to compare wrist actigraphy with polysomnography (PSG). We studied 45 children (29 M/16 F), aged between 1 and 12 years (5.8 ± 2.7 years, mean ± SD). Actigraphic data were collected during standard overnight PSG. Data from the actiwatch were analysed over four separate activity threshold settings (low, medium, high, auto). Actigraphic data were compared epoch‐by‐epoch with the matching PSG. Sleep time was not different from PSG values for the low or auto activity thresholds, but was significantly less on the medium and high activity thresholds (P < 0.05). In contrast, the low and auto activity thresholds significantly underestimated wake time (P < 0.05), whilst that recorded on the medium and high activity thresholds were not different to PSG values. Agreement rates across the thresholds were all high ranging from 85.1% to 88.6%. Predictive value for sleep and sensitivity were also high with values ranging from 91.6% to 94.9% and 90.1% to 97.7%, respectively. In contrast, predictive value for wake and specificity were low ranging between 46.7–65.6% and 39.4–68.9%, respectively. There was no effect of subject age, OAHI or PSG arousal index on AR for any of the activity thresholds. We conclude that actigraphy is a reliable method for determining sleep in children when compared against PSG. Actigraphy may be a useful tool in paediatric sleep clinics and research.