Objective: Research on psychopharmacological treatment in children and adolescents is the subject of ongoing ethical discussion, as minors with mental disorders constitute a vulnerable patient group. Considering the important legislative changes in pediatric research over the past decade in both the US and Western Europe, there is a need to review recent developments in this area. Method: Based on a systematic literature review, a hermeneutical analysis focusing the main issues of ethics in child and adolescent psychopharmacology is provided. Legal and regulatory aspects of psychopharmacological research in children are compared between the US and Europe. Relevant issues were informed assent and consent to research participation, minimal risk and burden of research, ethics of pharmacogenetics, research on “me-too” medications, and justice in global research. Additionally, the concern about undue influence of financial interests in research is also addressed. Conclusion: Incentives for the conduct of clinical trials with children comparable to those contained in US legislation are now provided in the EU. Research to develop “me-too” preparations may have no significant benefit for children, but can cause research burden and detract from clinically more important projects by utilizing limited investigator time and patient resources. Thus far, pharmacogenetic studies may bring more individualized treatment approaches into child psychiatry but they remain at present a promise for the future. Finally, the issues of avoiding undue influence from funders and conflicts of interest remain a prominent concern which can be solved by declaring conflicts and publishing all results of studies extensively.