Chinese American students are often perceived as problem-free high achievers. Recent research, however, suggests that high-achieving Chinese American students can experience elevated levels of stress, especially comparing to their peers from other ethnic groups. In this paper, we examine how family dynamics may influence psychological adjustment among a group of high-achieving adolescents. Drawing on survey data collected on 295 Chinese American and 192 European American 9th graders attending a highly selective magnet school, our findings show that Chinese American adolescents reported significantly lower levels of psychological adjustment (d = -0.31), and significantly less family cohesion (d = -0.34) and more conflict (d = 0.56) than their European American peers. Further, the ethnic differences on adjustment disappeared after controlling for perceptions of family cohesion and conflict, indicating that such perceptions may be a key factor in understanding the high academic achievement/low psychological adjustment paradoxical pattern of development among Chinese American adolescents. (Contains 3 tables.)