Children with persistent asthma are at increased risk for mental health problems. Although mechanisms of effect are not yet known, it may be that children are less trusting of the family as a source of support and security when they have more severe asthma. This study tested whether asthma severity is related to children's perceptions of insecurity in the family, and whether insecurity is in turn associated with child adjustment. Children (N = 168; mean age = 8 years) completed story stems pertaining to routine family events (e.g., mealtimes) and ambiguous but potentially threatening asthma events such as tightness in the chest. Responses were evaluated for the extent to which appraisals portrayed the family as responding in cohesive, security-provoking ways. Asthma severity was assessed by both objective lung function testing and primary caregiver report. Caregivers reported child symptomatology. Beyond medication adherence, caregiver education, and child age and gender, greater asthma severity predicted more internalizing and externalizing symptoms. Greater asthma severity, assessed using spirometry (but not parent report), was related to less secure child narratives of the family, which in turn related to more child internalizing symptoms. Results suggest that asthma can take a considerable toll on children's feelings of security and mental health. Furthermore, given the difficulty in assessing young children's perceptions, this study helps demonstrate the potential of story stem techniques in assessing children's appraisals of illness threat and management in the family.