Collaborative goal setting between clinicians and clients/families is considered a fundamental component of the pediatric rehabilitation process. However, truly client-centered goal setting is not without its challenges. The purpose of this paper is to highlight theoretical concepts relevant to rehabilitation goal setting, review clinical studies directly evaluating relationships between goal setting and pediatric rehabilitation outcomes, and provide recommendations to facilitate collaborative goal processes. Four theoretical frameworks were identified that may lie behind and help explain the effectiveness of collaborative goal setting. The four relevant outcome studies found in the review revealed that individualized goal setting is an important component of the intervention, engages families more actively in therapy, and is associated to some extent with positive outcomes. The evidence suggests that the impact of fully collaborative goal setting is sufficiently positive to support investment of organizational and individual time, energy, and resources to make it an integral part of the rehabilitation process.