As the first major activity of the initiative, NMHA worked jointly with the National GAINS Center for People with Co-occurring Disorders in the Justice System to develop a process to help communities assess the scope of need and quality of services provided to young people. In the fall of 1997, NMHA conducted a multi-state study of the needs of youth with mental health and substance abuse disorders in the juvenile justice system and policies and programs in place to serve these young people. Data were collected in Colorado, Georgia, Indiana, Kentucky, Louisiana, Maryland, New York, South Carolina, Texas, Virginia, and Washington from structured interviews with juvenile justice and mental health administrators, service providers, juvenile and family court judges, and law enforcement personnel. Findings revealed many communities recognized mental health and substance abuse problems among youth in their juvenile justice systems as important issues and were beginning to take positive steps to address them. At the same time, several common themes regarding service and policy gaps emerged from the interviews. Most respondents identified front-end (prevention and early intervention) and back-end (aftercare) services as being significant gaps. Substance abuse services, dual diagnosis services, and services targeted especially for young offenders were also cited by many jurisdictions as lacking. Major barriers to service delivery included lack of adequate funding, problems with insurance and managed care policies, differences in treatment philosophies between agencies, lack of outreach and family involvement, confidentiality issues, and lack of interagency coordination. Substantial variations were noted in the kinds of services provided to young people, and there was a general lack of resources to address the treatment needs of young people. Recommendations to better meet the treatment needs of youth in the juvenile justice system are offered that focus on changing attitudes, cooperation, resources, the early identification of children with needs, family involvement in treatment and justice systems, service gaps, and educating stakeholders. Case studies and promising programs are described in appendixes.