<b><i>Introduction:</i></b> This study aimed to analyze the changes in differential renal function (DRF) after laparoscopic pyeloplasty in children with high-grade hydronephrosis and factors influencing DRF improvement. <b><i>Methods:</i></b> We reviewed the clinical data of unilateral ureteropelvic junction obstruction (UPJO) patients with SFU grade IV who underwent laparoscopic pyeloplasty between February 2018 and October 2020. The patients were divided into two groups: DRF improvement ≥5% (group 1) and DRF improvement &#x3c;5% (group 2). Preoperative, operative, and postoperative parameters were included in the statistical analysis in both groups. <b><i>Results:</i></b> A total of 29 patients with a median age of 6 months were included. The preoperative DRF in group 1 was significantly lower than that in group 2 (36.97 ± 8.47% vs. 45.19 ± 5.22%, <i>p</i> = 0.004). Logistic regression and receiver operating characteristic analysis showed the preoperative DRF was the predictor for renal function improvement after pyeloplasty (<i>p</i> = 0.021) and had a significant predictive value (<i>p</i> = 0.004). <b><i>Conclusion:</i></b> Nearly half of the patients with high-grade UPJO had improved renal function at 1 year follow-up after laparoscopic pyeloplasty. Preoperative DRF was a predictor of renal function improvement, and postoperative functional recovery was superior in children with lower preoperative DRF.