Children of parents with a mental illness have been identified as vulnerable to experiencing a variety of psychosocial effects arising from the impact of parental mental illness. Many children do not however, experience difficulties as a result of their parent's mental illness and are able to thrive despite what may be an adverse situation. Until recently there has been a lack of adequate service provision in Australia for these children and their families. Recent government initiatives have led to greater awareness and recognition of the needs of children whose parents have a mental illness, and key principles and actions have been developed to assist health services to adequately care for them.The aim of this paper is to overview the risk and protective factors that may impact on the psychosocial health of children of parents with a mental illness, and provide some strategies that nurses in a range of health settings may use to assist families where parents have a mental illness.