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The association between family functioning and adolescent adjustment was examined in 429 Chinese adolescents via children's and parents' reports. The ratings obtained from the different sources indicated that family functioning was significantly related to measures of (a) adolescent psychological well-being (general psychiatric morbidity, life satisfaction, purpose in life, hopelessness, and self-esteem), (b) school adjustment (perceived academic performance and school conduct), and (c) problem behavior (smoking and abusing psychotropic drugs). The findings suggest that there is an intimate link between family functioning and the psychosocial adjustment, particularly the positive mental health, of Chinese adolescents.