Thirty-five children of 28 mothers diagnosed with breast cancer during the previous year were compared to 34 children of 24 mothers with recent benign breast biopsies. Mothers and children, ages 8–16, completed questionnaires about mood, behavior problems and social functioning to assess whether children of mothers with breast cancer were at increased risk for adjustment problems. Significant differences were not found between children in the breast cancer group and the comparison group on any of the measures, even though mothers with breast cancer reported more psychological distress than mothers with benign biopsies. In addition, children in both groups were functioning better than normative samples on some adjustment measures. Variables measuring the mother's illness and treatment were not significantly related to children's adjustment in the breast cancer group. Findings suggested that some adolescents whose mothers had breast cancer did better in social and academic activities when their mothers were more distressed, while adolescents whose mothers had benign biopsies did less well when their mothers were distressed. The study's small sample size limits conclusions that can be drawn; however, clinical and research implications are discussed, given other reports that some children of parents with cancer may experience adjustment problems. Copyright © 2001 John Wiley & Sons, Ltd.