Ryan Reynolds believes he has a ''functioning family'' now that he has two children.

The 40-year-old actor and his wife Blake Lively welcomed their second daughter - the younger sister to their 23-month-old daughter James - into the world in September, and Ryan has said it's ''amazing'' to watch their eldest daughter ''taking care'' of the new arrival.

Speaking to 'Entertainment Tonight', the 'Deadpool' star said: ''They look alike. You can see that she's sort of a little mini version of our older girl.

''But, no, it's great. It's like an actually cohesive, working, functioning family. It's amazing to see my older daughter taking care of my younger one. 'The Lion King' was right! The circle of life exists.''

It isn't the first time the 'Green Lantern' actor has gushed over James' ability to take care of their youngest daughter - whose name has yet to be revealed to the public - as he previously described the sight as ''profound''.

Ryan said: ''It was kind of profound. I just love watching my older daughter take care of the newborn. That's been kind of neat to see.''

And 'The Proposal' actor - who married 29-year-old Blake in 2012 - also insisted that having a second child hasn't changed the ''dynamic'' of their household.

He said: ''It didn't change the dynamic. There's just more. There's more love, there's more diapers. There's more of all that stuff, you know.''

Meanwhile, Ryan claimed that fatherhood was ''the best thing'' to ever happen to him, but confessed he isn't particularly strict with his daughters.

He said: ''It's the best thing. You know, it's the best thing that could ever happen to you.

''It's really hard to have boundaries because you just do anything they say. Like, anything they'll say!''