Objective: Many older adults in Indonesia live with their children. This study examined the relationship between the quality of the relationship that elderly parents may have with their children living with them and any effects on psychological well-being. Methods: Relationship quality encompasses positive and negative aspects. This study employed convenience sampling and to reach 102 elderly participants. A measure of positive and negative social exchanges was used to measure the relationship between elderly parents and their children. Ryff’s Scale of Psychological Well-Being was utilized to measure the psychological well-being of the subjects. We used descriptive statistics, Pearson correlation coefficient, an independent t-test, and one-way analysis of variance (ANOVA) to assess the statistics produced. Results: The primary results showed no correlation between the positive qualities of the relationship and psychological well-being (r = 0.092, p > 0.01). However, the negative qualities of the relationship were negatively correlated with psychological well-being (r = −0.335, p < 0.01). Conclusion: Thus, negative qualities of relationships with their children were found to be more impactful on psychological well-being than positive qualities in elderly parents who maintain coresidence with their children. This means that the greater the lack of sympathy, intrusion, failure to provide needed help, and rejection/neglect from the child, the worse the psychological well-being of the elderly parent. © The Author(s) 2019.