The purpose of this study is to examine effect of horticultural therapy on mental development and interpersonal relationship of institutionalized children. This study executed horticultural therapy program of the total 16 times by one time a week to institutionalized children who have used H-Institution for children in Kyungsang Buk-do from September 21, 2006 to January 4, 2007. To examine effect of horticultural therapy, this study used the korean personality rating scale for children(KPRC), withdrawn scale, self-concept scale, and interpersonal relationship scale, and investigated before and after executing the program for comparison. Mental development was reduced from 90.87 before executing to 72.25 after executing horticultural therapy, and it was statistically significant(P<0.01). Also in withdrawn scale test, the mean point was appeared to be significantly raised(P<0.05) from 8.875 before executing to 6.25 after executing the program, and horticultural therapy was considered to be effective to mental stability of institutionalized children. In result of evaluating self-concept, it was raised from 207.37 before executing to 228.5 after executing, and it showed the significant difference(P<0.01). Also in result of evaluating interpersonal relationship, it was raised from 73.25 before executing to 83.75 after executing, and it showed the significant difference(P<0.05). Accordingly, horticultural therapy is considered to be effective to mental development and interpersonal relationship of institutionalized children.