Foster care is the preferred alternative for out-of-home care, but not necessarily beneficial for foster children’s psychosocial functioning. This dilemma leaves researchers with a challenge to find out more about the factors related to foster children’s social and emotional functioning. In a sample of 446 Dutch foster children we examined the extent to which three clusters of characteristics, those akin to the foster child, the foster family, or foster placement, were related to foster children’s functioning at the time of research. Multivariate three-step hierarchical regression analyses were performed for three outcome variables: externalizing problems, internalizing problems, and prosocial behavior. We found that all three clusters of foster care characteristics were significantly related to foster children’s functioning. Foster placement characteristics, in particular interventions aimed at foster children, explained the largest amount of variance in behavior problems. Children receiving interventions had more externalizing and internalizing problems. A possible explanation is that interventions are indicated for those foster children who are in the highest need of additional support. Prosocial behavior was particularly related to foster family characteristics. The results were mostly in line with international research. Careful screening and monitoring of the social and emotional functioning of foster children may help to identify problems at an early stage. In addition (preventive) support should be offered to those foster children and families who are in need of it.