After the rapid growth of pediatric antipsychotic prescribing in the early 2000s, especially in the Medicaid population, concerns regarding the safety and appropriateness of such prescribing increased. Many states implemented policy and educational initiatives aimed at safer and more judicious antipsychotic use. Antipsychotic use leveled off in the late 2000s, but there have been no recent national estimates of trends in antipsychotic use in children enrolled in Medicaid, and it is unclear how use varied by race and ethnicity. This study observed a sizable decline in antipsychotic use among children ages 2-17 between 2008 and 2016. Although the magnitude of change varied, declines were observed across foster care status, age, sex, and racial and ethnic groups studied. The proportion of children with an antipsychotic prescription who received any diagnosis associated with a pediatric indication that was approved by the Food and Drug Administration increased from 38 percent in 2008 to 45 percent in 2016, which may indicate a trend toward more judicious prescribing.