The objectives of this study were to characterize 24-month trajectories of psychopathology, validate psychopathology groups, and identify youth, parent, family, and neighbourhood characteristics associated with each identified trajectory in a sample of youth with chronic physical illness (CPI). Data come from a longitudinal study of 263 youth aged 2–16 years diagnosed with CPI and their parents. Participants were recruited from outpatient clinics at a pediatric hospital in Canada and assessed at recruitment (baseline), 6, 12, and 24 months. Parents reported on youth psychopathology using the Emotional Behavioural Scales. Latent class growth analysis was used to identify trajectories of psychopathology. Baseline predictors of trajectory group membership were investigated using multinomial logistic regression. Three distinct psychopathology trajectories best fit the data; the model had a BIC of -3579.70 and average posterior probabilities of 0.97. The trajectories were classified as, low-stable (LS: n = 156, 58%), moderate-decreasing (MD: n = 85, 34%), and high-decreasing (HD: n = 21, 8%). Youth who were older [HD: OR = 1.33 (1.05, 1.69)], had higher disability scores [HD: OR = 1.31 (1.19, 1.45) and MD: OR = 1.14 (1.08, 1.21)], had parents with greater psychological distress scores [HD: OR = 1.11 (1.05, 1.18) and MD: OR = 1.04 (1.01, 1.07)], and came from households with higher incomes [HD: OR = 4.67 (1.06, 20.67)] were associated with higher psychopathology trajectories compared to LS. Parent-reported youth psychopathology was generally low over 24 months, though over one-third had symptoms that reflected borderline clinical psychopathology. Predictors for group membership could help identify at-risk youth with CPI early for psychopathology.