The study addressed the mental health and psychosocial needs of young offenders by gender, ethnicity, and placement (custody or community-based); examples of good practice and models of mental health provision for young offenders; continuity of care and changing needs of young offenders transitioning from custody into the community; whether mental health needs predict future offending; cost of services; and the effectiveness of interventions in reducing offending and meeting mental health needs. The research was divided into three parts: current service provision, data on costs and needs, and "what works" in addressing mental health needs and offending. Six geographically representative areas across England and Wales were selected, each containing a youth offending team (YOT) and a secure facility. A total of 151 young offenders from secure facilities and 150 from the community were interviewed using the Salford Needs Assessment Schedule for Adolescents, which is a validated mental health screening tool; a health economics questionnaire; and standardized IQ assessments. Of the secure sample, 75 were reinterviewed an average of 9 months later and monitored through police data and telephone interviews with their YOT case managers. High levels of needs were found in mental health, peer and family relationships, and education or work. Female offenders had more mental health needs than males, and ethnic minorities had higher rates of posttraumatic stress. Offenders in the community had significantly more needs than those in secure care. Overall, there was a lack of evidence-based intervention packages, inadequate staff training, and poor continuity of care. The 15 recommendations pertain to strategic planning, assessment, and interventions.