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STUDY QUESTION How do families with children conceived using donor sperm operate as the children grow up? SUMMARY ANSWER Families with children aged 5–13 years conceived through anonymous donor sperm function well, when compared with other family types with children of the same developmental stage. WHAT IS KNOWN ALREADY Previous studies on family relationships after donor sperm conception have been reassuring. However, these studies have suffered from methodological limitations due to small sample sizes, respondent biases and absence of appropriate controls. STUDY DESIGN, SIZE, DURATION This study was an observational study comparing 79 ‘donor insemination’ (DI) families with 987 ‘couple’ families, 364 ‘single mother’ and 112 ‘step-father’ families as part of the Australian Institute of Family Studies Children and Family Life (CFL) study. CFL involved the collection of data on family functioning and child wellbeing from all resident parents through a Family and Child Questionnaire for the ‘primary’ parent (FACQ-P1) and a Family Relationship Questionnaire (FRQ-P2) for the ‘other’ parent. PARTICIPANTS/MATERIALS, SETTING, METHODS All questionnaires were coded with the identity known only to the researchers. The outcomes studied included parent psychological adjustment, family functioning, couple relationship, parenting and parent–child relationship. Family types were compared, separately for mothers' and fathers' reports. The results presented are the estimated means for each family type based on the final model for each outcome: post hoc comparisons between family types are reported with 95% confidence limits. MAIN RESULTS AND THE ROLE OF CHANCE With all of the outcomes considered, there was not one result where the DI families showed poorer functioning on average than the comparison groups. LIMITATIONS, REASON FOR CAUTION The final sample size of DI families is 79 with an excellent response rate of nearly 80%. However, there remains some scope for response bias. WIDER IMPLICATIONS OF THE FINDINGS This study further reassures us that families conceived with anonymous donor sperm do not function any differently from other family types. STUDY FUNDING/COMPETING INTERESTS The study was partly funded by a research grant from the Fertility Society of Australia, and the profits from a Serono Symposium on Polycystic Ovaries. There are no competing interests. [ABSTRACT FROM AUTHOR]