Children who are in foster care or who have been adopted often face uncommon challenges, as do their families and providers. Child and adolescent psychiatrists have a unique role in aiding these children and their adult caretakers. Foster care has long been a source of public policy debate over the role of child welfare agencies in determining when to remove a child, and more recently over the costs of placements and additional services that these children often need. Current controversies concern gay and lesbian foster care, custody relinquishment, multiple placements, and health-care delivery while in foster care. We focus initially on entry into foster care and the implications for the child, particularly the impact on their health and development. Other factors considered include care coordination, or lack of, multiple placements, and grandparent/kinship care. Issues surrounding adoption are explored, including "closed" and "open" adoptions, race, and age. We emphasize recent research on gay and lesbian biological families, and the finding that they are just as capable at raising children as heterosexual parents at adoption. Also highlighted is the choice between custody and care that faces many parents of severely mentally ill children. Finally we look at the special concerns relating to international adoption. Case vignettes are presented to highlight the practical aspects of fostering and adoption.