Neurologic and psychological sequelae are observed 1 year after hospitalization for multisystem inflammatory syndrome in children (MIS-C), but whether these concerns persist is not known. To examine the trajectory of neurologic, psychological, and quality-of-life sequelae up to 2 years after MIS-C. This longitudinal cohort study assessed children diagnosed with MIS-C from August 1, 2020, to August 31, 2021, and matched sibling and community controls, when available. The study was conducted 6 to 12 months and 18 to 24 months after discharge from a US or Canadian hospital. Data analysis was performed from May 2024 to January 2025. Hospitalization for MIS-C. A central study site remotely administered a structured interview, surveys, neuropsychological assessment, and neurologic examination. Group differences were assessed using generalized estimating equations, accounting for matching. Variables extracted from hospital records included intensive care unit admission and echocardiographic left ventricular ejection fraction (LVEF). Overall, 95 participants were included in the study; 93 of 108 participants (86%) returned from the year 1 study and 2 participants were added in year 2 (median [IQR] age, 12.6 [11.0-15.7] years; 38 [40%] female and 57 [60%] male). Fifty-nine patients with MIS-C (mean [SD] age, 13.2 [4.0] years; 39 [66%] male) and 36 controls (mean [SD] age, 13.5 [3.5] years; 18 [50%] male) enrolled. In year 2, the MIS-C group was similar to controls on all outcome measures, except they had more somatization symptoms (Behavior Assessment Scale for Children, Third Edition mean [SD] somatization score, 52.1 [13.0] vs 46.5 [8.5]; mean difference, 5.2; 95% CI, 1.3-9.1). Within the MIS-C group, scores generally improved between initial and follow-up evaluations, a finding that was not observed in controls. Eight of 13 children with MIS-C (62%) who had abnormal neurologic examination findings in year 1 had normal examination findings by year 2. Among patients with MIS-C, measures of higher illness severity during hospitalization were associated with worse executive function in year 2 (National Institutes of Health [NIH] List Sort Working Memory Test score, -7.3 points per intensive care unit admission vs not [95% CI, -14.3 to -0.3 points] and -5.8 points per LVEF category change [95% CI, -9.1 to -2.6 points]; verbal fluency switching score, -0.8 points per LVEF category change [95% CI, -1.5 to -0.1 points]). In this longitudinal, matched cohort study of children with MIS-C and controls followed up sequentially up to 2 years after hospital discharge, children with MIS-C had more somatic symptoms than control children. Overall, however, patients with MIS-C had improved neurologic and psychological outcomes between the testing intervals, performing similarly to controls on most measures by year 2 follow-up. These findings suggest that these concerns may improve over time.