We examined the psychosocial maladjustment of 32 children with an incarcerated parent from the child's perspective as well as from the perspective of their caregiver. We focused on the relation between the incarcerated parent's report of children's exposure to parental criminal activity, arrest, and sentencing and caregivers' and children's self-reports of maladjustment. Results indicate that witnessing these events is associated with more behavior problems according to caregivers' and children's self-reports. Moreover, incarcerated parents' reports of children's exposure to these events predicted caregivers' and children's reports of maladjustment over a 6 month period. Our results also suggest that children with incarcerated mothers, in comparison to children with incarcerated fathers, are exposed to more of these events and may be experiencing greater maladjustment. Implications of these findings are discussed within a proactive context and the use of procedures that take children's reactions to witnessing parental arrest and sentencing into consideration.