This study examined the effectiveness of a cognitive-behavioural therapy programme for 13 children treated for severe emotional or behaviour disorders in a hospital setting. Data were obtained from multiple informants at pre-treatment, post-treatment, and three months follow-up. Results indicated statistically significant improvement in the children's global psychological functioning and reduction of maladaptive internalizing behaviours with maintenance at follow-up. The children reported statistically significant reduction in clinical maladjustment at discharge only. A positive trend toward healthier adaptive functioning was noted. Prognosis was poorer for children with comorbid diagnoses of internalizing and externalizing disorders. Clinical implications and directions for future research were discussed. (Contains 3 tables.)