Background: Research in war-torn regions has mainly focused on the impact of traumatic experiences on individual mental health and has found high prevalence rates of psychiatric disorders in affected adults and children. However, little is known about the possible protective factors occurring in children’s environments in the aftermath of mass trauma. Therefore, we conducted a cross-sectional study with families in Northern Sri Lanka, a region that had been shattered by a long-lasting civil war and devastated by the Asian tsunami in 2004. Methods: Schoolchildren aged 7 to 11 (N = 359) were interviewed on the basis of standardized measures to assess children’s exposure to traumatic events, mental health symptoms, and parenting behavior as perceived by children. All interviews were carried out by local senior counselors. Results: Linear regression analyses identified exposure to mass trauma and family violence as significant risk factors of child mental health whereas parental care emerged as a significant factor associated with fewer behavior problems. In addition, parental care significantly moderated the relationship between mass trauma and internalizing behavior problems. Conclusions: Family characteristics seem to be strongly associated with children’s mental health even in regions severely affected by mass trauma. This finding is particularly relevant for the development of targeted psychosocial interventions for children and families living in war torn areas.