This review paper examines the literature on psychosocial factors associated with adjustment to sickle cell disease and insulin-dependent diabetes mellitus in children through the framework of the transactional stress and coping (TSC) model. The transactional stress and coping model views adaptation to a childhood chronic illness as mediated by several psychosocial factors. This review examines the utility of the model in explaining adjustment in two different childhood diseases, identifies needed research and intervention targets, as well as highlights potential changes to the model. The major conclusions of this review suggest that, in addition to child-specific factors, family functioning is an area that interventions should address in sickle cell disease and insulin-dependent diabetes mellitus.