Purpose To examine emotional and behavioral characteristics of children with obstetrical brachial plexus palsy (OBPP), psychological distress of their mothers and their family functioning, and compare them with healthy peers. Methods Participants included 42 children with OBPP (22 boys, 20 girls; age range, 4-16 y; mean, 7 y 0 mo; SD, 3 y 3 mo) and 43 healthy controls (24 boys, 19 girls; age range, 4-15 y; mean, 8 y 0 m; SD, 3 y 0 mo). Childhood Behavior Checklist, Symptom Checklist 90, and Family Assessment Device were filled in by the mothers. Results Participants with OBPP displayed higher problem scores than the comparison children in most of the domains, including internalizing and externalizing problems. Maternal distress was higher in the OBPP group, and few differences in family functioning were noted. Maternal distress and having the diagnosis of OBPP were the strongest predictors of children's total problem scores and explained 26% of the variance when the effect of age, sex, and family functioning were controlled. Conclusions Children with OBPP and their mothers are at increased risk for a variety of psychological problems. Professionals should be aware of these children's and their caregivers' psychological adjustment and refer them for further psychological support when needed. (J Hand Surg 2013;38A:137-142. Copyright (C) 2013 by the American Society for Surgery of the Hand. All rights reserved.)