Although funnel chest is the most frequently seen deformity of the anterior chest wall in children, there is still considerable controversy regarding three major aspects, namely, the frequency of such deformities, their physiological importance, and the methods available for treatment. We retrospectively analyzed our experience with the 154 patients managed in our department. In 81 of these an operation was performed (OP), and the clinical findings for this group were compared with the 73 patients in whom an operation was not performed (NOP). Evaluation included subjective findings, especially the views of the patients' parents, and objective findings, including chest radiographs, computed tomography (CT), spirogram, electrocardiography, and echocardiography. In all patients the assessment included postoperative respiratory symptoms, appearance of the chest, and psychological aspects related to the deformity. Post-operatively, respiratory symptoms almost invariably subsided. The cosmetic result could initially be regarded as satisfactory or fair during the first 10 years following surgery, but over time there was frequently increasing concern regarding the scar. The NOP patients showed significantly less severity of the funnel index compared with OP patients. However, there was no spontaneous improvement in the deformity in older patients; most of the NOP patients continued to show a cosmetic deformity and 26.7% had psychological problems. This retrospective study confirms that our treatment strategy of objective criteria for operation (functional compression index > 0.2, % vital capacity <80, and CT index less than 0.25) and timing of operation (between 4 and 6 years of age) provides good results. Based on the analysis of long-term follow-up, surgery is considered indicated in patients with severe deformity. However, in the interest of psychological development, the indications for surgery may be extended.