High sugar intake is associated with an increased risk of overweight. For parents, as their children’s nutritional gatekeepers, knowledge about sugar is a prerequisite for regulating sugar consumption. Yet little is known about parental ability to estimate the sugar content of foods and beverages and how this ability is associated with children’s body mass index (BMI). In 305 parent–child pairs, we investigated to what extent parents systematically under- or overestimate the sugar content of foods and beverages commonly found in children’s diets as well as potential associations with children’s z-BMI. Parents considerably underestimated the sugar content of most foods and beverages (e.g., 92% of parents underestimated the sugar content of yogurt by, on average, seven sugar cubes). After controlling for parental education and BMI, parental sugar underestimation was significantly associated with a higher risk of their child being overweight or obese (odds ratio = 2.01). There was a small dose–response relationship between the degree of underestimation and the child’s z-BMI. These findings suggest that providing easily accessible and practicable knowledge about sugar content through, for instance, nutritional labeling may improve parents’ intuition about sugar. This could help curtail sugar intake in children and thus be a preventive measure for overweight.