The study described the psychometric properties of the Pediatric Evaluation of Disability Inventory (PEDI) when used in Taiwanese normally developing children and illustrated the ethnic differences in determining capacity and independence in daily function between Taiwanese and American children. The Chinese version of the PEDI (PEDI-C) was administered to Taiwanese parents of 494 normally developing children and 110 children with developmental disabilities (DD). The scores of Taiwanese population were compared with the American counterparts using independent samples t-test. The PEDI-C had demonstrated good psychometric properties when used in Chinese-speaking population. The results revealed that internal consistency and inter-rater reliability was high. The unidimensionality of each domain was supported by Mokken analysis. The standardized factor scores of the PEDI-C differentiated children with DD from normally developing children. Group differences existed in various areas of daily function between Taiwanese and American children. Taiwanese children were less capable and needed more assistance in self-care and social function of daily living, especially after 4 years of age. Taiwanese and American children had similar capacity and performance in mobility. The identified discrepancy could serve as a guide of child-rearing for parents and for clinicians working with clients from different cultural backgrounds in a culturally diverse society. (Contains 7 tables and 1 figure.)