The birth of a sibling is a major source of stress in the life of a child. Child’s emotional and behavioural reaction to this event and effort to cope with ambivalent feeling depends on his/her interactions with parents before, and after the birth of a second child. This case report aims to highlight the importance of exploring and also considering family environment and interaction patterns among family members, in conceptualizing the problem and planning intervention in the case of a 5-year-old female child referred to neuropsychology OPD of IHBAS having an initial impression of generalized epilepsy with hallucinations. Clinical interview with parents and grandmother along with psychological assessment shed light that the child and parents had problem adjusting with the arrival of her baby sister and difficulty in adjusting with new roles of her parents, facilitating to conceive the case as Sibling rivalry disorder. The case report also highlights the use of not so commonly used intervention, i.e. Parent-child interaction therapy, with play therapy and parents’ counseling. Intervention with the child was focused to achieve conflict resolution, emotional regulation including improving the quality of interaction with parents and grandmother. Child was followed up for 6 months. Effective parenting skills especially parent child interaction is an important factor in a child’s mental health.