Diagnosis and treatment of children affected by disruptions of attachment (out of home placement, multiple changes of primary caregiver) is an area of considerable controversy. The possible contribution of psychobiological theories is discussed in three parts. The first part relates the attachment theoretical perspective to major psychobiological theories on the developmental associations of parent-child relationships and emotional response. The second part reviews studies of autonomic reactivity and HPA-axis activity with foster children, showing that foster children show more reactivity within physiological systems facilitating fight or flight behaviours rather than social engagement, especially foster children with atypical attachment behaviour. The third part is focused on treatment of children suffering from the consequences of disrupted attachment, based on a psychotherapy study with psychophysiological outcome measures. Implications are discussed for theory, diagnosis, and intervention.