The relationship between giftedness and psychological functioning has been studied extensively, but conflicting views persist. Whereas some studies have suggested that gifted children are at risk of developing emotional and behavioral disorders, others have proposed that they have superior socioemotional adjustment compared with average-ability peers. Using a large unselected sample (N = 3,918), we examined n = 100 gifted students matched via propensity score matching with n = 100 average-ability students. Gifted students showed higher academic achievement in math and reading (standardized test scores and grades), higher self-concept in math, and lower teacher-rated externalizing problems. All other comparisons on social and emotional-behavioral functioning as rated by parents, teachers, or classmates did not suggest any differences between the two groups. Giftedness appears to be a protective factor rather than a risk factor for psychological functioning. These results have important implications for the identification, support, and education of gifted children.