In many industrialised countries teenage pregnancy and teenage parenthood have in recent years been identified as social and public health problems that need to be tackled. A number of studies have looked at various outcomes for teenage mothers and their offspring, and many report a strong association with poverty for the mother both before and after having a child. Few studies, however, adequately control for socioeconomic circumstances when examining health and related outcomes. Most studies have focused on perinatal outcomes in the offspring with few looking at later health and development. In Australia, where the rate of teenage pregnancy is relatively high compared to other comparable countries, teenage pregnancy is a not prominent policy concern. As such, Australia offers the opportunity to study the outcomes of teenage parenthood in a country where there may be less stigma than in countries that portray teenage parenthood as a major health and/or social problem. This paper reports findings from the Mater-University Study of Pregnancy (MUSP) and its outcomes, a prospective study of women, and their offspring, who received antenatal care at a major public hospital (Mater Misericordiae Hospital) in South Brisbane, Australia, between 1981 and 1984. We have examined the associations of maternal age (< or =18 years (n=460) versus >18 years (n=4800)) at first antenatal visit with offspring psychological, behavioural and health characteristics when the offspring--the teenage children of teenage mothers--were aged 14 years. Multiple logistic regression was used to determine the effect of maternal and family characteristics on associations between maternal age and childhood outcomes at age 14. Results show that the 14 year old offspring of mothers who were aged 18 years and younger compared to those who were offspring of older mothers were more likely to have disturbed psychological behaviour, poorer school performance, poorer reading ability, were more likely to have been in contact with the criminal justice system and were more likely to smoke regularly and to consume alcohol. However, maternal age was not associated with health outcomes in their offspring at age 14 years. Indicators of low socioeconomic position and maternal depression were also associated with poorer psychological, cognitive and behavioural outcomes among 14 year olds. In addition children from poorer socioeconomic backgrounds and whose mothers were depressed were more likely to have self-reported poor health, asthma, to have been admitted to hospital twice or more since birth and to be bed-wetters at age 14. The associations between maternal age and psychological distress, school performance, and smoking and alcohol use were all largely explained by socioeconomic factors, maternal depression, family structure and maternal smoking. These findings confirm that not all teenage mothers and their offspring have adverse outcomes, and that many if not the majority have good outcomes.