The purpose of this study was to investigate whether and how handedness is related to the processes of cerebral lateralization and cognitive performance in children with congenital insult. Fifty-six children (31 males and 25 females) with congenital hemiparesis and 14 control subjects were investigated. Of these children, 32 had a left hemisphere lesion, and 24 children had a right hemisphere lesion. There were 30 right-handed, 23 left-handed, and three ambidextrous children in the study group. The neuropsychologic assessment was performed using the NEPSY (a developmental neuropsychological assessment of child development) test battery. We found that 41% of the hemiparetic children and 72% of the children with a left hemisphere lesion were left-handed. In children contralateral to lesion handedness (no evidence of interhemispheric transfer of functions), we found diffuse cognitive deficits with impaired language abilities and poor visuomotor and narrative memory processing. In contrast, children with ipsilateral to brain lesion handedness (interhemispheric transfer of functions) demonstrated minimal or moderate side-specific cognitive dysfunction. Right-handed children with a right hemisphere lesion had attention, spatial, and short-term memory problems; left-handed children with a left hemisphere lesion had receptive language and visuomotor difficulties. Handedness combined with neuropsychologic assessment is a reliable indicator of the processes of cerebral reorganization after early brain insult.