Objective To explore the diagnostic value of ambulatory electroencephalography (AEEG) and cranial magnetic resonance imaging (MRI) in pediatric epilepsy complicated with mental disorders and lesion localization, to provide reference for clinical practice. Methods The clinical data of 210 children with suspected epilepsy complicated with mental disorders admitted to the Xiangyang No.1 People’s Hospital Affiliated to Hubei University of Medicine from January 2020 to December 2022 were retrospectively analyzed. After admission, AEEG and cranial MRI were performed in all children, and the surgical pathological diagnosis was the gold standard. The diagnostic efficiency of AEEG and cranial MRI in epilepsy complicated with mental disorders was compared, and the localization results of AEEG and cranial MRI in epilepsy complicated with mental disorders were analyzed. Results The pathological diagnosis was positive in 128 cases and negative in 82 cases; AEEG diagnosis was positive in 126 cases and negative in 84 cases; Cranial MRI diagnosis was positive in 124 cases and negative in 86 cases. The results of consistency analysis showed that the Kappa value of AEEG and cranial MRI diagnosis of children with epilepsy complicated with mental disorders was 0.940 and 0.722, respectively ( P <0.05). Among the 128 cpediatric epilepsy complicated with mental disorders, 64 cases were located in the temporal lobe, 13 in the occipital lobe, 44 in the frontal lobe and 7 in the parietal lobe. The detection rate of AEEG for lesions in the temporal, occipital, and frontal lobes of pediatric epilepsy complicated with mental disorders was higher than that of cranial MRI ( P <0.05). Conclusion The diagnostic value of AEEG in pediatric epilepsy complicated with mental disorders and lesion localization is superior to that of cranial MRI, and it is worthy of clinical application.