In this study, the pedagogical decision-making processes of 21 Australian early childhood teachers working with children experiencing parental separation and divorce were examined. Transcripts from interviews and a focus group with teachers were analysed using grounded theory methodology. The findings showed that as teachers interacted with young children experiencing parental separation and divorce, they reported using strategic, reflexive pedagogical decision-making processes. These processes comprised five stages: (1) teachers constructing their knowledge, (2) teachers thinking about their knowledge, (3) teachers using decision-making schemas, (4) teachers taking action, and (5) teachers monitoring action and evaluating. This understanding of teachers' reflexive pedagogical decision-making is useful for identifying how teachers and educational leaders can support children experiencing parental separation and divorce or other life challenges.