Grandparents can be profoundly emotionally affected when a grandchild is diagnosed with cancer. They also often provide invaluable support for the family (e.g., caring for the sick child and/or siblings). Multigenerational family functioning may therefore change. Limited research has assessed grandparents' perspectives after their grandchild is diagnosed with cancer. In this study, we aimed to (1) assess differences in perceived family functioning among grandparents of a child with cancer and grandparents of healthy children and (2) assess the cancer-specific and demographic factors related to perceived family functioning in grandparents of a grandchild with cancer. Grandparents of a child with cancer (n = 89) and grandparents of healthy children (n = 133) completed the general functioning, communication, and problem-solving scales of the Family Assessment Device. We used multilevel models with a random intercept to detect (1) between-group differences and (2) identify factors related to perceived family functioning among grandparents with a grandchild with cancer. Grandparents with a grandchild with cancer reported poorer family functioning than grandparents with healthy grandchildren. Among the grandparents with a grandchild with cancer, impairments in family functioning were correlated with fewer years since diagnosis, providing care to their sick grandchild and/or siblings and living far away from the sick grandchild. The detrimental impact of childhood cancer likely extends beyond the immediate family members. Including grandparents in interventions-beginning at diagnosis-to reduce distress and increase cohesion for families of a child with cancer is warranted, particularly for grandparents who provide care to their sick grandchild or siblings.