Knowledge about refugee children's mental health has developed considerably during the last 30 years. From believing that children's reactions largely depend on their parents, it has become clear that children are influenced both by their own experiences, by the reactions of their caregivers and by the social environment in which they live. While psychological problems are frequent in children close to arrival in exile, follow-up studies have shown that the magnitude of the problems is reduced over time. Aspects of social life as well as stressful events in exile seem to be of paramount importance for children's ability to recover from early traumatization. Prolonged asylum procedures, temporary residence permits, delayed family reunifications, many school-moves and xenophobic attitudes is counteracting healthy development. The results of research on refugee children and youth indicate the existence of a large public health problem which calls for policy change and political action.