Background: Tobacco smoke exposure (TSE) is a major public health concern, impacting not only smokers but also those around them, particularly children and adolescents. TSE is linked to various neuropsychiatric conditions and significantly impacts quality of life. This study examines the prevalence, socio-demographic factors, and the impact of TSE on the severity of neurological and psychiatric co-morbidities. Methods: Data from the National Survey of Children’s Health (NSCH) in the US from 2020 to 2021 were used in this study. We included 91,404 children and adolescents aged between 0 to 17 years for the TSE prevalence and socio-demographic analysis, and 79,182 children and adolescents aged between 3 and 17 years for the neuropsychiatric co-morbidities analysis. The mean age of these individuals was 8.7 (standard deviation: 5.3), and 11,751 (12.9%) had confirmed TSE. Results: Our analysis showed that TSE is more common in males (53%) than females (47%). Additionally, the odds of TSE were higher in families with a lower income level and with American Indian/Native Alaska racial descent. We found that 36.4% of youths with TSE developed at least one co-morbid condition. The most common neuropsychiatric co-morbidities were anxiety problems (15.7%), Attention-Deficit Hyperactivity Disorder (ADHD) (15.5%), behavioral and conduct problems (13.7%), and learning disability (12%). Females had lower odds of co-morbid anxiety (OR: 0.3, p = 0.02) and Autism Spectrum Disorder (ASD) (OR: 0.9, p = 0.04) than males. Asians showed lower odds of co-morbid ADHD (OR: 0.3, p-value: 0.001), anxiety problems (OR: 0.4, p-value: 0.003), speech/other language disorder (OR: 0.4, p-value: 0.001), developmental delay (OR: 0.4, p-value: 0.001), behavioral and conduct problems (OR: 0.4, p-value: 0.003), and learning disability (OR: 0.5, p-value: 0.004). Conversely, American Indian children and adolescents had higher odds of co-morbid headaches (OR: 3, p-value: 0.005). TSE co-occurring with Tourette’s Syndrome (TS) (OR: 4.4, p < 0.001), ADHD (OR: 1.3, p < 0.001), developmental delay (OR: 1.3, p < 0.001), behavioral problems (OR: 1.3, p < 0.001), headaches (OR: 1.3, p = 0.005), depression (OR: 1.2, p = 0.02), anxiety (OR: 1.2, p < 0.01), ASD (OR: 1.2, p < 0.001), and learning disability (OR: 1.2, p = 0.03) may contribute to a more severe manifestation. Conclusions: ADHD, behavioral/conduct problems, and learning disabilities were the most prevalent co-occurring conditions with TSE. Our findings show that 36.4% of youths with TSE had at least one neuropsychiatric comorbidity. Screening for these conditions in youths exposed to TSE is crucial for early detection and interventions to increase their mental health and well-being.