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Mental health professionals are increasingly examining psychosocial issues of individuals with medical illnesses. Research has demonstrated that when the medical patient is a parent, the entire family experiences the crisis and impact of the diagnosis and treatment. Despite these findings, few studies have examined the impact of a parental life-threatening illness on children. The psychological and behavioral adjustment of children with a parent receiving a bone marrow transplant (BMT) was compared to that of children in a matched community group. Forty child-parent dyads (20 BMT and 20 Community) completed three self-report measures at pre and post-BMT to assess children's behavior, parental perceptions of behavior, family coping, and parental health status. Results of multivariate analyses indicated that children in the BMT group reported significantly higher levels of depression and anxiety and lower levels of self-competence than children in the community group prior to the transplant {dollar}(F(4,\\ 35)=7.83,\\ p>.001){dollar} but not at 14 days post-transplant {dollar}(p>.05).{dollar} No gender effects were found, however older children reported significantly higher depression scores than younger children {dollar}(F(1,\\ 36)=4.90,\\ p<.05).{dollar} No significant relationships were found between family functioning or ill parent health status and children's adjustment. Data obtained from a needs assessment questionnaire indicated that 85 percent of families reported experiencing some type of problem with their child, including behavioral problems, difficulty talking to a child about the parental illness, and difficulty deciding whether children should visit the parent in the hospital. Yet, only 35 percent of BMT patients and 20 percent of children of BMT patients received counseling or supportive services. This study suggests that children who have a parent undergoing BMT may benefit from psychosocial interventions to assist with coping and adjustment prior to the parental hospitalization. However, future studies with longer follow-up data are required to ascertain the course of children's adjustment to a parental life-threatening illness.