The psychosocial functioning of children of unipolar depressed, bipolar, medically ill, and psychiatrically normal women was studied over a 2-year period. Ninety-six children aged 8-16 years were assessed at 6-month intervals on Child Behavior Checklist behavior problems, social competence, internalizing and externalizing behaviors, academic performance, and school behavior. The children of unipolar mothers showed significantly poorer functioning on all measures as compared with the other 3 groups of children, including bipolar offspring. A greater proportion of children in the unipolar group also had relatively chronic, clinically significant problems in psychosocial functioning. Children of bipolar women did not differ from children of psychiatrically normal women. Results are discussed in terms of the consequences of children's continuing exposure to maternal depression and attendant stressors, as well as the contribution of social and academic difficulties to a vicious cycle of maladjustment.