The UK is facing a major increase in the number of people seeking asylum each year, of whom approximately a quarter are children. The stressors to which refugees are exposed are described in three stages: (1) while in their country of origin; (2) during their flight to safety; and (3) when having to settle in a country of refuge. The evidence concerning the impact of displacement on children's mental health is reviewed and a framework for conceptualising the risk factors is proposed. The available literature shows consistently increased levels of psychological morbidity among refugee children, especially post-traumatic stress disorder, depression, and anxiety disorders. The principles underlying the delivery of mental health care for these children are also considered. It is argued that much primary prevention can be undertaken in the school context. Some key aspects of British immigration law are examined and the tension between the law and the best interests of the child principle is discussed. There is particular concern for the plight of unaccompanied children. Attention to the mental health needs of this vulnerable group is urgently required.