Adding to prior literature on adults' and children's appraisals of stressors, this study examined relationships among children's negative cognitive errors regarding hypothetical negative divorce events, positive illusions about those same events, the actual divorce events, and children's post-divorce psychological adjustment. Subjects were 38 custodial mothers who had divorced and had not remarried, and children ages 8 to 12 years whose parents had divorced in the previous 24 months. The children, 19 girls and 19 boys, were participants in a preventive intervention program for children of divorced parents. Each child was interviewed at home while the mother completed questionnaires in a separate room. Children's scores on a scale of negative cognitive errors (catastrophizing, overgeneralizing, and personalizing) correlated significantly with self-reported symptoms of anxiety and self-esteem, and with maternal reports of behavior problems. Children's scores on a scale measuring positive illusions (high self-regard, illusion of personal control, and optimism for the future) correlated significantly with low degrees of self-reported aggression. The correlation between scores on the negative errors and positive illusions scales suggests that a child who endorses negative cognitive errors for diverse events may also endorse positive illusions, and vice versa. Some children may admit negative information into appraisals of themselves, the world, and the future, but in a way that they retain positive illusions as well. (Contains 15 references.) (MM)