This study examined how various living environments (child‐headed households, orphanages, street children and foster homes), quality of care and demographic factors were associated with the psychosocial well‐being of orphans in Rwanda by using a sample of 430 participants. Results indicated that children in orphanages exhibited higher levels of emotional well‐being and lower levels of mental distress and risk‐taking behaviour than others. Decision‐making ability was the highest among child‐headed households, while it was the lowest among those in orphanages. Quality of care, such as meal availability and length of time spent in a particular living environment, along with demographic factors, such as age and sex, were also important predictors of psychosocial well‐being.