Advanced myelodysplastic syndrome (MDS) in children includes refractory anaemia with excess blasts (RAEB) and RAEB in transformation (RAEB‐T) according to the paediatric modification of the World Health Organization classification. Clinical features and cytogenetics are essential to make a diagnosis because blast count alone is insufficient to differentiate MDS from acute myeloid leukaemia (AML). Little is known about molecular genetics in paediatric MDS but hypermethylation seem to be frequent. Monosomy 7 is the most common cytogenetic aberration but prognostic neutral whereas those with structural complex karyotype have a very poor outcome. Haematopoietic stem cell transplantation (HSCT) is the treatment of choice and results in cure rates of around 60%. Intensive chemotherapy prior to HSCT provides no survival benefit for children with RAEB and RAEB‐T and can generally not be recommended. Intensive chemotherapy before HSCT should be considered in patients with myelodysplasia‐related‐AML (MDR‐AML).