Toxic epidermal necrolysis (TEN) and Stevens-Johnson syndrome (SJS) are rare, life-threatening mucocutaneous diseases, usually attributable to drugs and infections. Corticosteroids have been used in the management of TEN for the last 30 years. This remains controversial and is still much debated. TEN can occur despite administration of high doses of systemic corticosteroids. The psychiatric side effects of corticosteroids can include headache, insomnia, depression, and mood disorders with or without psychotic episodes. Steroid-induced psychosis is dealt with by tapering or discontinuing the steroid; antipsychotics are also sometimes used. We report a case of an 11-year-old boy who was admitted with TEN. He had also been diagnosed as having nephrotic syndrome in the past. Remission was achieved through induction therapy and by maintaining the use of steroids. After a full-dose intravenous dexamethasone for TEN, he showed psychotic symptoms. We diagnosed him as having steroid-induced psychosis. We tapered the steroid use and initiated an atypical antipsychotic medication, olazapine and intravenous immunoglobulin (IV-IG). His symptoms dramatically improved and he was discharged.