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This research focused on behavioral functioning of children conceived via gestational surrogacy and raised by gay fathers. Gay fathers from 68 families with children aged 3–10 years completed the Achenbach Child Behavior Checklist. Their scores were compared to those from a normative sample of parents matched for parent’s occupation and children’s gender, age, and race/ethnicity. Children of gay fathers received significantly lower scores on internalizing (anxiety, depression) and externalizing (aggression, rule-breaking) than children in the comparison sample. Most notably, daughters of gay fathers had significantly lower internalizing scores than did daughters in the national database. Gay fathers also completed measures of parenting styles, social support, and perceived prejudice. Fathers who reported less authoritarian or permissive parenting, more positive coparenting, and more social support from friends had children with fewer behavior problems. Gay fathers’ reports of family members receiving higher levels of antigay microaggressions were associated with parents’ greater stigma consciousness, more anger/aggression from spouse/partner, and less positive parenting and coparenting. Results are discussed in terms of gay and heterosexual parents’ gender-related socialization of daughters’ internalizing problems and the impact of minority stress on same-sex couples’ parenting.