diff --git a/docs/rules/no-children-prop.md b/docs/rules/no-children-prop.md
index b3a5b4b705..c4607ae33b 100644
--- a/docs/rules/no-children-prop.md
+++ b/docs/rules/no-children-prop.md
@@ -34,3 +34,29 @@ The following patterns are **not** considered warnings:
 React.createElement("div", {}, 'Children')
 React.createElement("div", 'Child 1', 'Child 2')
 ```
+
+## Rule Options
+
+```js
+"react/no-children-prop": [<enabled>, {
+  "allowFunctions": <boolean> || false
+}]
+```
+
+### `allowFunctions`
+
+When `true`, passing a function in the children prop is preferred.
+
+The following patterns are considered warnings:
+
+```jsx
+<MyComponent>{data => data.value}</MyComponent>
+React.createElement(MyComponent, {}, data => data.value)
+```
+
+The following are **not** considered warnings:
+
+```jsx
+<MyComponent children={data => data.value} />
+React.createElement(MyComponent, { children: data => data.value })
+```
diff --git a/lib/rules/no-children-prop.js b/lib/rules/no-children-prop.js
index f8e341dab7..35942b687e 100644
--- a/lib/rules/no-children-prop.js
+++ b/lib/rules/no-children-prop.js
@@ -36,15 +36,38 @@ module.exports = {
       recommended: true,
       url: docsUrl('no-children-prop')
     },
-    schema: []
+    schema: [{
+      type: 'object',
+      properties: {
+        allowFunctions: {
+          type: 'boolean',
+          default: false
+        }
+      },
+      additionalProperties: false
+    }]
   },
   create: function(context) {
+    const configuration = context.options[0] || {};
+
+    function isFunction(node) {
+      return (node.type === 'ArrowFunctionExpression' || node.type === 'FunctionExpression')
+        && configuration.allowFunctions;
+    }
+
     return {
       JSXAttribute: function(node) {
         if (node.name.name !== 'children') {
           return;
         }
 
+        const value = node.value;
+        if (value && value.type === 'JSXExpressionContainer') {
+          if (isFunction(value.expression)) {
+            return;
+          }
+        }
+
         context.report({
           node: node,
           message: 'Do not pass children as props. Instead, nest children between the opening and closing tags.'
@@ -59,10 +82,31 @@ module.exports = {
         const childrenProp = props.find(prop => prop.key && prop.key.name === 'children');
 
         if (childrenProp) {
-          context.report({
-            node: node,
-            message: 'Do not pass children as props. Instead, pass them as additional arguments to React.createElement.'
-          });
+          if (childrenProp.value && !isFunction(childrenProp.value)) {
+            context.report({
+              node: node,
+              message: 'Do not pass children as props. Instead, pass them as additional arguments to React.createElement.'
+            });
+          }
+        } else if (node.arguments.length === 3) {
+          const children = node.arguments[2];
+          if (isFunction(children)) {
+            context.report({
+              node: node,
+              message: 'Do not pass a function as an additional argument to React.createElement. Instead, pass it as a prop.'
+            });
+          }
+        }
+      },
+      JSXElement: function(node) {
+        const children = node.children;
+        if (children && children.length === 1 && children[0].type === 'JSXExpressionContainer') {
+          if (isFunction(children[0].expression)) {
+            context.report({
+              node: node,
+              message: 'Do not pass nest a function between the opening and closing tags. Instead, pass it as a prop.'
+            });
+          }
         }
       }
     };
diff --git a/tests/lib/rules/no-children-prop.js b/tests/lib/rules/no-children-prop.js
index 33de83bfa6..fcda031f70 100644
--- a/tests/lib/rules/no-children-prop.js
+++ b/tests/lib/rules/no-children-prop.js
@@ -22,6 +22,8 @@ const parserOptions = {
 
 const JSX_ERROR = 'Do not pass children as props. Instead, nest children between the opening and closing tags.';
 const CREATE_ELEMENT_ERROR = 'Do not pass children as props. Instead, pass them as additional arguments to React.createElement.';
+const JSX_FUNCTION_ERROR = 'Do not pass nest a function between the opening and closing tags. Instead, pass it as a prop.';
+const CREATE_ELEMENT_FUNCTION_ERROR = 'Do not pass a function as an additional argument to React.createElement. Instead, pass it as a prop.';
 
 // -----------------------------------------------------------------------------
 // Tests
@@ -140,9 +142,37 @@ ruleTester.run('no-children-prop', rule, {
     },
     {
       code: 'React.createElement(MyComponent, {className: "class-name", ...props});'
+    },
+    {
+      code: '<MyComponent children={() => {}} />;',
+      options: [{
+        allowFunctions: true
+      }]
+    },
+    {
+      code: '<MyComponent children={function() {}} />;',
+      options: [{
+        allowFunctions: true
+      }]
+    },
+    {
+      code: 'React.createElement(MyComponent, {children: () => {}});',
+      options: [{
+        allowFunctions: true
+      }]
+    },
+    {
+      code: 'React.createElement(MyComponent, {children: function() {}});',
+      options: [{
+        allowFunctions: true
+      }]
     }
   ],
   invalid: [
+    {
+      code: '<div children />;', // not a valid use case but make sure we don't crash
+      errors: [{message: JSX_ERROR}]
+    },
     {
       code: '<div children="Children" />;',
       errors: [{message: JSX_ERROR}]
@@ -198,6 +228,34 @@ ruleTester.run('no-children-prop', rule, {
     {
       code: 'React.createElement(MyComponent, {...props, children: "Children"})',
       errors: [{message: CREATE_ELEMENT_ERROR}]
+    },
+    {
+      code: '<MyComponent>{() => {}}</MyComponent>;',
+      options: [{
+        allowFunctions: true
+      }],
+      errors: [{message: JSX_FUNCTION_ERROR}]
+    },
+    {
+      code: '<MyComponent>{function() {}}</MyComponent>;',
+      options: [{
+        allowFunctions: true
+      }],
+      errors: [{message: JSX_FUNCTION_ERROR}]
+    },
+    {
+      code: 'React.createElement(MyComponent, {}, () => {});',
+      options: [{
+        allowFunctions: true
+      }],
+      errors: [{message: CREATE_ELEMENT_FUNCTION_ERROR}]
+    },
+    {
+      code: 'React.createElement(MyComponent, {}, function() {});',
+      options: [{
+        allowFunctions: true
+      }],
+      errors: [{message: CREATE_ELEMENT_FUNCTION_ERROR}]
     }
   ]
 });