Objective: The use of placebo in the pediatric age group has come under increasing scrutiny. At the 2002 Annual Meeting of the American Academy of Child and Adolescent Psychiatry, the Academy's Workgroup on Research conducted a research forum. The purpose was to identify challenges and their solutions regarding the use of placebo in randomized controlled trials in pediatric psychopharmacology. Method: Workgroups focused on problems and solutions in five areas: ethics and human subjects, research design and statistics, partnering with consumers, U.S. Food and Drug Administration and pharmaceutical industry perspectives, and psychosocial treatments. Results: In many but not all circumstances, inclusion of a placebo control is essential to meet the scientific goals of treatment outcome research. Innovative research designs; involvement of consumers in planning and implementing research; flexibility by industry, academia, the National Institutes of Health, and regulatory agencies acting in partnership; and concomitant use of evidence-based psychosocial services can and should assist in making placebo-controlled trials acceptable. Conclusions: Properly designed placebo-controlled trials remain necessary, ethical, and feasible.