As an unprecedented number of children live in families experiencing divorce, researchers have developed increasingly complex explanations for the consequences associated with marital dissolution. Current accounts focus on changes to family finances, destabilized parenting practices, elevated parental conflict, and deterioration of the parent–child relationship, to explain the impact of divorce. A less studied explanation draws attention to children's diminished psychosocial well-being following divorce. Using data from the Early Childhood Longitudinal Study—Kindergarten cohort (ECLS-K) (N = 10,061), I examined the role of psychosocial well-being in the relationship between divorce and children's outcomes. The results suggest that divorce is associated with diminished psychosocial well-being in children, and that this decrease helps explain the connection between divorce and lower academic achievement.