This study used data from Waves I and II of the Taiwan Educational Panel Survey (TEPS) to explore the potential short-term and long-term effects of parental illness and health condition on children's behavioral and educational functioning. A sample of 11,018 junior high school students and their parents and teachers in Taiwan were included in this present study. The results supported previous work that parental illness may place children at slight risk for poor psychosocial adjustment and behavioral problems. Parental illness was associated with lower adaptive skills and more behavioral problems in children. Children of ill parents showed resilience in their educational functioning in the event of parental illness as children's academic achievement and learning skills were not related to parental illness/health condition.