The appalling young-adult outcomes of youth with serious emotional disturbance who are served in public systems demonstrate a failure of standard services to address the unique needs of these youths during their transition from adolescence to adulthood. This article discusses the needs of this population and the current ability of mental health and other relevant agencies to meet those needs. The contrast between needs and system status is presented through a framework of contrasting developmental and institutional transitions. This article reviews the barriers to effective system reform, and the recommendations for changes made by national panels focused on transition and applied research.