The objective of the study is to investigate the functional ability, i.e., the physical aspect of the health-related quality of life and its determining factors during therapy with etanercept in children with juvenile idiopathic arthritis (JIA). Assessment of the Child Health Assessment Questionnaire (CHAQ), the number of active joints, duration of morning stiffness, ESR, C-reactive protein, parent’s global assessment of the overall patient’s well-being, physician’s global assessment of the overall disease activity, concomitant treatment with methotrexat, number of aids/devices needed, and calculation of the PedACR-score. Data of 437 children were analyzed for disease severity and impact of the disease on functional abilities. Data of 114 children with a complete data set and a continuous treatment for at least 24 months were used for analysis of the impact of treatment on functional abilities. Before treatment with etanercept, patients with systemic arthritis and seropositive or seronegative polyarthritis were disabled more heavily than those with other subtypes of JIA. There was a correlation between high CHAQ scores and the number of active joints, aids/devices needed, parent’s global assessment of the overall patient’s well-being, morning stiffness, physician’s global assessment of the overall disease activity, and C-reactive protein (P < 0.005). Of the eight areas, “dressing and grooming”, “arising”, “eating”, “walking”, “hygiene”, “reach”, “grip” and “activities”, the latter was most severely affected. 96.5, 93.8, and 90.3% of the patients reached a PedACR-30, -50 and -70 score upon treatment with etanercept for 24 months. The areas of eating and walking were best before therapy and showed highest improvement with therapy. Under therapy with etanercept patients of all JIA subgroups significantly improved their functional ability (P < 0.0001), but patients with polyarthritis less frequently improved their physical functioning. Disease activity and the physical aspect of health-related quality of life including functional ability improved significantly during therapy with etanercept in children with JIA. Duties of everyday life were easier to accomplish.