Large numbers of children in New Zealand suffer from mental health problems, and large numbers of children suffer from poverty and hardship. This literature review provides information on the relationship between poverty experienced during childhood and the impact that poverty may have on the mental health of a child or young person, or later in their adulthood. It was found that: • There is an accepted relationship between poverty experienced in childhood and a greater likelihood of mental health problems through the life span. • Child poverty and its associated problems such as poor nutrition, inadequate housing, increased likelihood of adverse events and living in poor neighbourhoods put children at higher risk of having mental health problems. • The evidence strongly suggests that the incidence of mental health conditions among children and adolescents can be reduced by addressing severe and persistent poverty, particularly during the early years of a child’s life. • Intervention to address poverty and the effects of poverty on children is likely to prevent the perpetuation of inter-generational cycles of poverty and poor mental health. • The prevalence of child poverty and mental health issues is likely to be higher for Māori and Pasifika than for other children and young people. • While many Māori and Pasifika children are subject to inequities in material and socio-economic circumstances as well as institutional racism, they also experience the benefits of a rich cultural life and sense of belonging that is seldom accounted for in research reports that focus on deprivation. The evidence strongly suggests that the incidence of mental health problems throughout the lifespan could be reduced through addressing the causes of child poverty and associated factors. Any mental health strategy for children should sit alongside a comprehensive programme to alleviate poverty. Strategies aimed at addressing child poverty in Māori and Pasifika communities are more likely to be effective if these are well-resourced at an early stage and developed in a genuine partnership with local communities.