A group of 124 children orphaned by AIDS (COA), who resided in two orphanages funded by the Chinese government, participated in a study investigating the efficacy of a grief-processing-based psychological group intervention. This psychological intervention program was designed to specifically help COA process their grief and reduce their psychological distress. Six sessions of group intervention focused on processing grief, reducing traumatic symptoms and psychological distress, and fostering hope about the future. At the three-month post-test, children in both groups (intervention group and control group) reported significant reduction in trauma symptoms and demonstrated similar levels of hope. However, the intervention group reported significantly increased levels of grief processing and decreased levels of trauma symptoms, depression, and threat appraisal. The intervention group also reported subjective improvements in mood, relationships, individual growth, self-confidence, and perceived social support. These outcomes supported the potential efficacy of grief-processing-based psychological intervention to reduce the psychological distress among COA.