Introduction: Although most children with unilateral cerebral palsy can achieve independent mobility levels with or without assistive devices, they remain susceptible to decreased participation. This study aimed to explore the potential factors affecting participation of children with unilateral cerebral palsy. Method: Fifty children with unilateral cerebral palsy were enrolled. The degree of spasticity in the upper limb muscles was assessed using the Modified Ashworth Scale, active range of motion of the upper limb joints was assessed using a universal goniometer, and activity performance was measured using the ABILHAND-Kids and Gross Motor Function Measure. Environmental factors and mental health were evaluated using the European Child Environment Questionnaire and Strength and Difficulties Questionnaire. The Child and Adolescent Scale of Participation was used to assess participation. Results: Path analysis showed that upper limb impairment had both direct (β = −0.41; p < 0.05) and indirect (β = 0.64; p < 0.001) effects on participation. Most importantly, it was found that the participation of children with unilateral cerebral palsy was notably influenced by environmental factors and mental health (β2 = −0.42; p < 0.05, and β2 = −0.36; p < 0.05). Conclusion: Participation of children with unilateral cerebral palsy is affected by a combination of functioning and contextual factors.