In 2000, the New South Wales (NSW) Youth Drug Court (YDC) pilot program was established. The aim of the program is to reduce among participants the level of criminal activity and other problematic behavior associated with the misuse of drugs and alcohol. The program combines intensive judicial supervision, case management, drug treatment, and other relevant interventions for young people charged with serious criminal offenses. This report presents an evaluation of the YDC in order to provide regular and timely data on the implementation of the YDC program and evaluate its short-term impacts and longer-term effectiveness. The YDC evaluation encompassed a range of methods aimed at capturing different aspects of the pilot program’s operations. These included: statistical monitoring of program referral and take-up; participants’ characteristics and their progress through the program; process evaluation of the implementation and operation of the program; review of legal issues arising from the YDC’s operations; a study of the outcomes of the program for participants, both in terms of their reoffending and their health and social functioning; and an analysis of the costs of running the program. Evaluation findings are presented in several areas: (1) program outcomes including activities undertaken, offending, drug use, and health and social functioning; (2) the program’s attraction for eligible offenders; (3) critical success factors and barriers to program implementation, including accommodation, detoxification, urinalysis, residential rehabilitation and day programs, sanctions for non-compliance, graduation, program monitoring and management, and resources; (4) legal issues including eligibility criteria, bail and custody, sanctions for non-compliance, sentencing, conflicts of interest, legal advice, participants’ awareness and informed consent, special needs and discrimination, and the need for legislation; and (5) program costs. The YDC has been achieving outcomes superior to those that might have been gained through other forms of intervention. Overall, the program is having an important, positive impact on the lives of many of those participating. The unit costs of achieving these impacts on a group of young people with entrenched drug use and criminal histories do not appear to be greater than those involved in keeping them in custody. A key recommendation presented is that the program should continue and possibly be expanded to selected other geographical areas. Figures, tables and references