Childhood acute myeloid leukemia is rare, but accounts for a significant number of malignancy-related deaths in this age group. However, the prognosis has improved over past decades, and survival rates of 60% and above have been reported. Still, this implies that more than a third of children and adolescents die from this disease. Moreover, treatment is intensive, and quality of life and late effects are worrying issues. Therefore, there is a need for further improved treatment of pediatric acute myeloid leukemia. This review describes several important developments in this respect, such as improved diagnostics, prognostic factors, subgroup-directed and tailored treatment, and targeted therapy. In addition, background information is provided and current treatment strategies are described, as well as the late effects of treatment. Most groups now have risk-group adapted protocols, with allogeneic stem cell transplantation often being reserved for the higher risk group. Even in these cases, the benefit of stem cell transplantation has not been demonstrated beyond reasonable doubt with current high-intensive chemotherapy. Similarly, the use of cranial irradiation for CNS prophylaxis and maintenance treatment does not seem to be indicated in general. Subgroup-directed treatment has become a reality for acute myeloid leukemia in young children with Down’s syndrome and in acute promyelocytic leukemia. In addition to tailoring therapy according to biologic features and especially monitoring treatment by measurements of minimal residual disease, targeted therapy for subgroups with activating mutations in receptor tyrosine kinases will further optimize the treatment of pediatric acute myeloid leukemia. Together with the development of many novel agents that have different mechanisms of action than the currently available anticancer agents, and improved supportive care, it is realistic that the prognosis of acute myeloid leukemia in children and adolescents will improve further in the next 5–10 years.