To examine the association between objectively assessed secondhand smoke (SHS) exposure and mental health in a representative sample of British children. Cross-sectional study. Community-based population sample from the 2003 Scottish Health Survey. Nine hundred one nonsmoking children (mean [SD] age, 8.3 [2.5] years). Exposure to SHS was determined from salivary cotinine level and self-report. Psychological distress assessed using the Strengths and Difficulties Questionnaire (SDQ). Forty percent of the sample demonstrated high SHS exposure (cotinine level >0.70 ng/mL). Children with higher cotinine levels were more likely to live in areas of greater socioeconomic deprivation. Participants in the highest cotinine quartile (>0.70 ng/mL) had significantly higher total SDQ scores compared with those in the lowest quartile (age- and sex-adjusted mean difference = 2.8; 95% confidence interval, 1.6 to 3.9). There was evidence of a dose-response effect across the cotinine group (P trend = .001). Of the SDQ subscales, the strongest associations with cotinine levels emerged for hyperactivity and conduct disorder. These associations remained statistically significant after adjustment for possible confounders including social deprivation, single-parent status, body mass index, chronic illness, and physical activity. Objectively assessed SHS exposure was associated with poorer mental health among children.