Background: Physical illnesses create a spiraling augmentation of psychological distress, both to the sufferer and to the caretaker. This is especially so, when the sufferer is a child. Prompt recognition and evaluation of psychiatric problems are essential, because psychiatric co-morbidity exacerbates the course of medical illness, causes significant distress to the patient, prolongs hospital-stay, and increases cost of care. Methodology: The present study thus aims to understand the psychological consequences of Acute Lymphoblastic Leukemia on the children, their family burden, Functional capacity, illness related variables and their associations with psychopathology. Results: Children with ALL are more prone for Psychological disturbances than major Psychiatric disorders. Depressive Conduct disorder is the most common among children with ALL in our study. Longer the duration of illness significantly increases psychopathology but treatment period do not show association with psychopathology. The presence of psychiatric disturbances significantly reduces global functioning in the Children with ALL. Presence of Psychopathology significantly interferes with Family interactions, Family dynamics, Financial Burden and Subjective distress. Conclusion: Development of chronic illness in Children results in major impact on their physical growth, emotional maturity, social relationships, Family dynamics and academic achievements. These children should be given not only utmost medical care but their emotional suffering should also be addressed. They should be encouraged to express verbally and should be spent with adequate attention to their psychological needs and concerns. Their parents should be adequately educated about the illness and its outcome so that they may be effectively fulfilling adequate parental role.