The nature and extent of the neuropsychological difficulties associated with childhood absence epilepsy (CAE) remain unclear. Because aberrant thalamocortical rhythms have been implicated in the pathogenesis of CAE, it was hypothesized that children with CAE would show greater difficulties in neuropsychological domains that are thought to be subserved by basal ganglia–thalamocortical circuits. Multivariate analysis of variance was used to compare the neuropsychological functioning of 16 children with CAE with that of 14 children with type 1 diabetes mellitus and 15 healthy children. The CAE group did not perform differently from the other groups on measures of intellectual functioning, memory, academic achievement, fine motor speed, or processing speed. In contrast, significant differences were found in problem solving, letter fluency, complex motor control, attention/behavioral inhibition, and psychosocial functioning. These results suggest that children with CAE show difficulties in neuropsychological functions thought to be subserved by the same regions implicated in the pathogenesis of the disorder.