This research investigated the prevalence of mental disorders in children and adolescents in Australia, and the severity and impact of those mental disorders. Mental disorders are common in children and adolescents, with the twelve-month prevalence of mental disorders being 13.9%, with 2.1% of children and adolescents having severe disorders, 3.5% with moderate disorders and 8.3% mild disorders. The most common class of disorders was attention-deficit/hyperactivity disorder followed by anxiety disorders. Mental disorders were more common in step-, blended- or one-parent families, in families living in rented accommodation and families where one or both carers were not in employment. Mental disorders were associated with a substantial number of days absent from school particularly in adolescents. Accurate information about prevalence and severity of child and adolescent mental disorders is an essential prerequisite for effective mental health policy and service planning.