The present study examined psychiatric functioning in a community sample of adolescents aged 14 to 17 years (average age of 15 years). We administered the Diagnostic Interview Schedule for Children-2.25 (DISC-2.25) to 1,201 adolescents and their mothers to obtain prevalence estimates of DSM-III-R disorders and the amount of perceived impairment associated with these disorders. While adolescent females reported a significantly higher prevalence of psychiatric disorders than males (15.5% vs. 8.5%), mothers indicated no sex difference. Compared with adolescent males, females had significantly higher rates of internalizing, anxiety. and depressive disorders. In contrast, the prevalence of externalizing disorders was significantly higher among adolescent males. The inclusion of an impairment criterion had a significant impact in reducing the prevalence rates of overall psychiatric disorders. This reduction occurred mainly through impairment's effects on internalizing disorders, specifically anxiety-based disorders (i.e., simple and social phobia). Given the limited research on the effect of impairment on the prevalence of adolescent psychiatric disorders, future work in this area seems warranted.