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The purpose of this study was to identify which domains of family functioning were associated with odds of internalizing versus externalizing mental health disorder, past-year health professional consultations, hospitalizations, and length of hospital stay in a sample of children with a mental health disorder. One hundred children aged 6–17 years who received mental health services (inpatient or outpatient) and their parents at a large clinical paediatric tertiary care centre in Ontario were recruited in this cross-sectional study. The final recruited and analyzed sample was children aged 8–17 years. Family functioning was measured using the McMaster Family Assessment Device (FAD), child mental health disorder using the Mini International Neuropsychiatric Interview, and mental health service use using items from the 2012 Canadian Community Health Survey (Mental Health). Higher scores on affective involvement and problem solving were associated with greater odds of major depressive disorder [OR = 2.12 (1.01, 4.43)] and social phobia [OR = 1.80 (1.09, 2.98)]. Reports of better communication were correlated with lower odds of generalized anxiety disorder [OR = 0.55 (0.35, 0.84)] and shorter length of stay in hospital [OR = 0.93 (0.89, 0.97)]. Higher scores on behaviour control were associated with lower odds of social phobia and oppositional defiant disorder [OR = 0.48 (0.27, 0.86) and OR = 0.52 (0.32, 0.84)], respectively. Future research should aim to gain an understanding of strategies that ameliorate family functioning to limit the impact and severity of childhood mental health conditions.