A nxiety disorders in children and adolescents are highly prevalent psychopathologies affecting as many as 10% of youth (1-3). These disorders are frequently associated with psychosocial difficulties, school difficulties, and risk for more serious conditions including depression, suicide, and substance abuse. The goals of treatment are to target overwhelming, incapacitating anxiety that interferes with functioning in social or academic spheres and to prevent a chronic Can J Psychiatry, Vol 48, No 11, December 2003 W 741 Objective: To determine whether individual and family characteristics of children with anxiety disorders who take psychotropic medications differ from those that are unmedicated and whether there is a differential response to cognitive-behavioural therapy (CBT). Method:Children ages 8 to 12 years (n = 102: 18 medicated, 84 unmedicated) were recruited in a specialized outpatient clinic over a 3-year period. All had a primary diagnosis of an anxiety disorder. Comparisons were done using t-tests for continuous measures and chi-square tests for discrete measures. Treatment-related changes were assessed using repeated measures analyses of variance.Results: Medicated and unmedicated groups did not differ by age, sex, socioeconomic status, or diagnostic profile. Initial ratings of anxiety symptoms, depressive symptoms, and global functioning were comparable. Greater family dysfunction and family frustration were reported in medicated children. With treatment, both groups improved symptomatically and showed improved family functioning. Families of medicated children showed a greater reduction in frustration than families of unmedicated children, whereas unmedicated children showed greater gains in global functioning. Conclusions:Initial family functioning of medicated children seems to show more disturbances. Both medicated and unmedicated children can benefit from CBT. Further studies of differential treatment effects for medicated and unmedicated children are indicated. Information on funding and support and author affiliations appears at the end of the article. Clinical Implications· Families of children with anxiety disorders who require medications may show higher rates of family dysfunction and family frustration. · Family dysfunction appears to improve with cognitive-behavioural therapy (CBT). · Even anxious children who require medications can benefit from CBT, although gains in global functioning may be more limited. Limitations· This was an exploratory, uncontrolled study without randomization. · Results were not corrected for number of comparisons. · Results must be replicated with the inclusion of more medicated children.