Seventy-three children and adolescents in end-stage renal failure (ESRF) undergoing haemodialysis (n = 32), continuous ambulatory peritoneal dialysis (CAPD) (n = 28) or with a functioning transplant (n = 13), were assessed, with their parents, on adjustment to dialysis and psychological functioning. Quantitative assessment techniques were used; the three treatment groups were compared using the Mann-Whitney U test. Findings showed a number of advantages of transplantation over dialysis, and of CAPD over haemodialysis. Children with transplants suffered less functional impairment (P = 0.007), less social impairment (P = 0.001) and fewer practical difficulties associated with treatment (P = 0.000) than children undergoing dialysis. Parents of children with transplants also reported fewer practical difficulties than parents of children on dialysis (P = 0.002). Dialysis and transplant groups did not differ on children's or parents' reports of psychological stress associated with treatment, parents' reports of marital strain, children's and parents' levels of anxiety and depression or children's behavioural disturbance. Compared with children undergoing hospital haemodialysis, those using CAPD suffered less social impairment (P = 0.004), reported better adjustment to dialysis (P = 0.031) and fewer practical problems associated with treatment (P = 0.005), had lower depression scores (P = 0.054), and showed less behavioural disturbance (P = 0.013). Parents of children undergoing either CAPD or hospital haemodialysis reported similar practical difficulties, psychological stress or marital strain associated with treatment, but mean depression and anxiety scores were lower in the parents of children undergoing CAPD (P = 0.042 and P = 0.054). The findings have clear implications for clinical practice and may help to choose the most appropriate renal replacement therapy for children in ESRF.