Children with "metabolically healthy obesity" (MHO) are a distinct subgroup of youth with obesity, who are less prone to the clustering of cardiometabolic risk factors. Although this phenotype, frequently defined by the absence of metabolic syndrome components or insulin resistance, was first described during the early 1980s, a consensus-based definition of pediatric MHO was introduced only recently, in 2018. The purpose of this review was to concisely summarize current knowledge regarding the MHO phenomenon in youth. The prevalence of MHO in children varies from 3 to 87%, depending on the definition used and the parameters evaluated, as well as the ethnicity and the pubertal status of the sample. The most consistent predictors of MHO in youth include younger age, lower body mass index, lower waist circumference, and lower body fat measurements. Various hypotheses have been proposed to elucidate the underlying factors maintaining the favorable MHO phenotype. While preserved insulin sensitivity and lack of inflammation were previously considered to be the main etiological factors, the most recent findings have implicated adipokine levels, the number of inflammatory immune cells in the adipose tissue, and the reduction of visceral adiposity due to adipose tissue expandability. Physical activity and genetic factors also contribute to the MHO phenotype. Obesity constitutes a continuum-increased risk for cardiometabolic complications, which is less evident in children with MHO. However, some findings have highlighted the emergence of hepatic steatosis, increased carotid intima-media thickness and inflammatory biomarkers in the MHO group compared to peers without obesity. Screening should be directed at those more likely to develop clustering of cardiometabolic risk factors. Lifestyle modifications should include behavioral changes focusing on sleep duration, screen time, diet, physical activity, and tobacco smoke exposure. Weight loss has also been associated with the improvement of insulin sensitivity and inflammation. Further investigative efforts are needed in order to elucidate the mechanisms which protect against the clustering of cardiometabolic risk factors in pediatric obesity, to provide more efficient, targeted treatment approaches for children with obesity, and to identify the protective factors preserving the MHO profile, avoiding the crossover of MHO to the phenotype with metabolically unhealthy obesity.