It is well established that children with familial high risk of schizophrenia (FHR-SZ) or bipolar disorder (FHR-BP) have a higher risk of developing mental disorders, however, little is known of to what degree the genetic and environmental vulnerabilities affect the quality of life and self-esteem of these children. We aimed to compare the quality of life and self-esteem between children with FHR-SZ or FHR-BP and controls. We used Danish nationwide registers to retrieve a cohort of 522 7-year-old children with FHR-SZ or FHR-BP and controls. Quality of life was assessed with the 'Health-related Quality of Life Screening Instrument', KIDSCREEN-27, and the scale 'Social Acceptance (Bullying)' from the KIDSCREEN-52. Self-esteem was assessed with the self-report scale 'I think I am'. Assessors were blind to familial risk status of the children. Children with FHR-SZ displayed lower levels of the general quality of life, as well as lower scores on the 'Psychological Well-being' scale and the 'School Environment' scale of the KIDSCREEN-27 compared with controls. Both children with FHR-SZ and FHR-BP reported more bullying victimization compared with controls. Children with FHR-SZ reported lower self-esteem on the total scale of 'I think I am', as well as on the 'Skills and talents', the 'Psychological well-being', and the 'Relationships with others' subscales compared with controls. The findings of lower quality of life and self-esteem in children with FHR-SZ together with more bullying victimization in both familial high-risk groups call for studies on low risk, early intervention strategies towards this group of vulnerable children.