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• Capability approach gives a dynamic grasp of Taiwan's poor children's well-being. • Capability deprivation affects more poor children than other forms do. • Capability deprivation poses a persistent challenge for poor children. • Different factor mixes lead to diverse well-being dynamics of poor children. • The capability approach provides new insights for children's service providers. In this paper, the well-being dynamics of Taiwanese poor children are analyzed by utilizing the 'Taiwanese Panel Data of Poor Children and Young People'. Guided by the capability approach, children could be deprived in terms of the interplay of functionings and capabilities. Our findings show that capability deprivation affect more poor children than other forms of deprivation do. Also, compared to the transitions of the other deprivation categories, there is a persistent nature in capability deprivation among poor children and young people. Moreover, changes in some resource factors (e.g., computers and pocket money) and conversion factors (e.g., gender, school transfer, child relationship with teachers or classmates) are found to have a significant relationship with their well-being dynamics. Based on the research findings, a proactive approach is proposed to expand the capabilities and freedoms of poor children. In addition, the research limitations that need addressing in future studies are considered. [ABSTRACT FROM AUTHOR]