Pediatric bipolar disorder, once considered rare, has reportedly increased in incidence over the past 10 years. There is significant debate about the phenomenology, diagnosis and treatment of this illness. The diagnostic assessment of children with severe mood and behavioural disturbance is of considerable public health importance as the ultimate diagnosis can have significant treatment implications and can impact the level of stigma experienced by children and their families. The purposes of this paper are to: 1) review current issues in the phenomenology and diagnostic assessment of bipolar disorder in children and adolescents; 2) review recent research suggesting that youths with a chronic course of illness should be considered a separate group from those with an episodic course; and 3) offer suggestions for future studies to address the various phenomenological controversies.