In this paper, an overview of children's psychological processes is presented within the context of adoption, foster care, or other type of placement which requires the child to develop the coping skills necessary to continue toward optimal growth psychologically, cognitively, and socially. Findings from a research review indicate that children raised in loving, caring, secure, consistent, and stable environments have a greater probability of developing socially, psychologically, physically, emotionally, and morally. Further, when alternative placements are necessary, if the child is placed in an appropriate setting the probability of the child achieving optimal growth through the developmental stages is greatly increased, provided that there is a sense of permanency. The probability of optimal growth is contingent on the willingness of the new primary caregivers to provide a safe and loving environment. Children faced with an uncertainty in their placements, whether long-term foster care or questionable placement with a biological parent that is subject to change, were found to have an increased probability of social maladjustment over their adopted counterparts. Regardless of the placement decision, the report finds that the earlier a permanent placement is determined, the better the chances for the child's adjustment. (Contains 33 references.) (CR)