This study examined the psychosocial adjustment of children with asthma compared to children with diabetes, with cancer, and healthy children and the role of functional status in psychosocial adjustment. The total sample included 100 children, aged 8-16 years, (mean = 11.5 years), consisting of 48 boys and 52 girls. Children with asthma scored significantly higher on measures of affective adjustment (depression and internalizing behavior), significantly lower on self-esteem, and evidenced significantly greater functional impairment. Children with cancer missed significantly more school days. After controlling for functional status, no significant differences remained in affective adjustment but absences remained significantly higher for the children with cancer.