It was examined whether friendship quality (FQ) and friends' anxiety predicted treatment outcome in 116 children with anxiety disorders (72.3% Australian) receiving cognitive behavioural therapy (CBT). Target children and an identified close friend aged between 7 and 13 years (50% female) completed the Friendship Quality Questionnaire (Parker & Asher, 1993) before treatment, and child diagnoses were based on the Anxiety Disorders Interview Schedule for DSM-IV-Child/Parent Version (Silverman & Albano, 1996). Children who reported higher FQ were significantly more likely to be free of their initial primary anxiety disorder and of any anxiety disorder at posttreatment and 6-month follow-up; friend report of FQ and friend's anxiety as measured by the Spence Child Anxiety Scale (Spence, 1998) did not predict treatment outcome. Children with anxiety disorders reporting higher FQ responded better to CBT than children with anxiety disorders reporting lower FQ. FQ measures could help identify anxious children at heightened risk of poor treatment response. Further, good quality friendships may be an important aid in anxious children's treatment response.