Bipolar disorder (BPD) is a potentially lifelong condition characterised by extreme changes in mood that may begin in childhood and cause substantial impairment. Over the past decades, BPD has been the focus of increased attention mainly due to controversies surrounding its prevalence, diagnosis and treatment in children and adolescents. This report addresses these controversies by reviewing the extant evidence base, providing clinicians with a summary of the literature on diagnosis, phenomenology and treatment of paediatric BPD. The debate regarding diagnosing children with BPD based on severe irritability and aggression is mostly resolved. The current data support utilising the diagnostic criteria based on episodic changes of mood polarity. Therefore, longitudinal course of illness should be explored in detail when diagnosing BPD. Given high rates of genetic predisposition for BPD, assessment of youth should focus on obtaining accurate family history of this condition. Additionally, there has been a substantial increase in randomised placebo-controlled clinical trials evaluating pharmacological agents for mood stabilisation in children and adolescents, which we summarise in this review. Despite significant progress being made in the field of paediatric BPD, more research is needed in the areas of phenomenology, pathophysiology, course and treatment of this condition in youth.