Grandparents (GP) play influential roles in grandchildren’s health, behavior, and life. However, this relationship has not been examined in the Arab region. This study assesses whether the presence of GP in the household is associated with grandchildren’s health and wellbeing. Health status was determined by a child experiencing chronic health conditions or an acute illness, and wellbeing was determined based on school attendance and child labor. Data were collected through surveys conducted in 2010 and 2015 of representative samples of Palestinian refugees living in Lebanon. Multivariate logistic regression showed that, even after controlling for potential confounders, including the presence of parents in the household and household food insecurity (FI), the presence of live-in GP was associated with lower odds of children experiencing acute illnesses (OR 0.74 95% CI 0.62–0.92) and higher odds of attending school (OR 2.22 95% CI 1.28–5.33), but not child labor. The presence of GP in the household may be protective to grandchildren’s health status and school attendance in this population.