This chapter focuses on the principles and practices of functional diagnosis in infants and very young children, emphasizing the complexity of early assessment. While the traditional diagnostic methods (e.g., assessment of tone, posture, and reflexes) are often insufficient due to the rapid developmental changes occurring during infancy, a dynamic, holistic approach centered on observing functional abilities, such as the spontaneous motor repertoire (General Movements), and the child’s interaction with their environment, was shown to be more reliable. Given the importance of early identification of developmental disorders, in order to enable timely intervention and support, a multidisciplinary framework, combining medical, neurological, psychological, and social evaluations, is necessary to build a comprehensive understanding of the child’s functional profile. The chapter explores the use of standardized tools and observational methods that assess motor skills, communication, emotional regulation, and social behaviors. Special attention is given to the role of caregivers, whose insights are vital in forming an accurate picture of the child’s daily functioning. The approach promotes not just identifying deficits but recognizing strengths and developmental potential. Overall, it is underscored that functional diagnosis at an early age is not a one-time act but a continuous process, guiding tailored interventions and supporting optimal developmental outcomes.