Background/Objectives: To determine the impact of psychiatric disorders on epilepsy treatment outcomes and healthcare utilization in children with epilepsy (CWE) based on the presence or timing of the onset of psychiatric disorders. Methods: This retrospective controlled study enrolled children (age < 18 years) with newly diagnosed epilepsy into four groups stratified by the presence and timing of the onset of psychiatric disorders (None: no psychiatric disorders; Before: psychiatric disorders only preceding the epilepsy diagnosis; After: new psychiatric disorders diagnosed only after the epilepsy diagnosis; Mixed: different psychiatric disorders diagnosed both before and after epilepsy diagnosis) and compared the intergroup differences in epilepsy treatment outcomes and healthcare utilization. Results: Among the CWE (n = 37,678), 13,285 (35.26%) had comorbid psychiatric disorders. The After (n = 7892), Mixed (n = 3105), and Before (n = 2288) groups had significantly longer treatment periods than those in the None group (p < 0.001). Compared with the None group, the remaining groups had significantly higher frequencies of outpatient visits, emergency room visits, and admissions and higher rates of status epilepticus and drug-resistant epilepsy (p < 0.001, respectively), with higher odds ratios [95% confidence interval] for status epilepticus (2.92 [2.68-3.18]) and drug-resistant epilepsy (3.01 [2.85-3.17]) in the After group. Conclusions: Psychiatric comorbidities, diagnosed before and after epilepsy diagnosis, negatively affected the treatment outcomes. CWE without prior psychiatric disorders that were newly diagnosed during epilepsy treatment had the worst outcomes and the highest healthcare utilization rates.