In contemporary Western society, many adults use praise to boost children's self‐esteem. Accordingly, they might praise those who seem to need it the most: children with low self‐esteem. In this article, we review research showing that certain types of praise can backfire, especially in children with low self‐esteem. Adults are inclined to give children with low self‐esteem person praise (e.g., “You're smart!”) and inflated praise (e.g., “That's incredibly beautiful!”). Paradoxically, such praise can lower these children's motivation and feelings of self‐worth in the face of setbacks (e.g., when they struggle or fail). Lowered feelings of self‐worth, in turn, might invite more person praise and inflated praise from adults, creating a self‐sustaining downward spiral. We propose a transactional model to shed light on this apparent praise paradox, and we describe the model's implications for theory and research.