Children (N = 110) hospitalized on a child psychiatric unit improved significantly in psychological functioning at discharge and 1- and 6-months follow-up relative to their functioning at admission. Children who were more impaired at admission made more progress during admission but were more impaired at follow-up than children who had milder symptoms at admission. Children without a behavior disorder had a better outcome than children with a behavior disorder. None of the other variables, alone or in combination, was significantly related to admission progress or follow-up outcome, including specific diagnoses, gender, race, age, IQ, family functioning, negative life events, parent education and employment, biological family history, length of hospitalization, parent involvement during admission and follow-up services.