Living with idiopathic short stature (ISS) may entail significant risks to psychological functioning and quality of life. Apparent inconsistency among study findings can be resolved if methodological differences among study designs are taken into account (i.e., definition of particular endpoints, sample selection from clinic or population, source of report, specific or generic assessment instruments, statistical control of confounders). Some individuals fail and others succeed in mastering the challenges of ISS. The principles of multifinality and equifinality may explain the emergence of a broad variation of individuals with ISS as a result of an interaction of the individual medical and auxological features on the one side, and psychosocial risk and protective factors on the other. As a result, patients may show heterogeneous developmental outcomes ranging from clinical psychopathology to development of resilience. A taxonomy of four distinct pathways of adaptation to ISS is delineated as a basis for case formulation and treatment planning. Psychological intervention in ISS includes counseling, cognitive-behavioral therapy and assertiveness training to improve psychological functioning via enhancement of target coping behaviors for critical situations.