This article explores from a psychoanalytic perspective a variety of challenges confronted by children in alternative care settings such as orphanages, sleep-away schools, post-disaster shelters, and even home environments altered by war. Among these challenges are the effects of sexual abuse and fear of it recurring, the assault on the child’s and adolescent’s developing sense of self, and irrational guilt connected with traumatic events. The indirect, but very powerful, effects of being cared for by war-traumatized adults are explored. Recommendations on how to help and protect these children and to improve the effectiveness of their caretakers are made.