Abstract Background: Anxiety is one of the most common psychological disorders affecting school-aged children. Orphaned children are particularly vulnerable because of parental deprivation, emotional insecurity, institutional living, and limited opportunities for emotional expression. Persistent anxiety negatively affects children's cognitive, emotional, social, and academic functioning. Non-pharmacological interventions that promote emotional well-being are increasingly recommended in pediatric mental health. Art therapy, especially clay modelling, provides children with a safe, creative, and non-verbal medium to express emotions, reduce stress, and improve coping abilities. Objective: To evaluate the effect of art therapy on the level of anxiety among schoolers residing in selected orphanages in Thiruvananthapuram District. Hypothesis: There is a significant difference in the level of anxiety after application of art therapy among schoolers in the experimental group. Methods: A quantitative pre-experimental one-group pretest–posttest design was adopted. Fifty school-aged children with mild to moderate anxiety were selected using purposive sampling from selected orphanages after screening with the Spence Children's Anxiety Scale. Clay-based art therapy was administered for 30 minutes daily over a period of 30 consecutive days. Anxiety levels were reassessed using the same standardized instrument after completion of the intervention. Descriptive and inferential statistics were used for data analysis. Results: Before the intervention, 70% of participants exhibited moderate anxiety and 30% had mild anxiety. Following the intervention, 22% of children demonstrated normal anxiety levels, 66% had mild anxiety, and only 12% remained moderately anxious. Statistical analysis revealed a significant reduction in anxiety scores following art therapy, supporting the effectiveness of the intervention. Conclusion: Clay-based art therapy significantly reduced anxiety among school-aged children residing in orphanages. The intervention is simple, economical, child-friendly, and can be integrated into pediatric nursing practice and institutional child care settings to promote psychological well-being.