Context: All youth, especially those with serious emotional disturbances (SED), face challenges as they transition to adulthood. Little is known about rural youth at risk for transition problems. Purpose: To examine transition-age youth who use publicly funded services in rural and urban/suburban locations in Tennessee in order to describe youth at risk for transition difficulties who need policy and service planning. Methods: Using Medicaid enrollment and claims/encounter data, youth at high risk for transition difficulties were identified in the following groups: SED, at risk of or in foster care/state custody, intensive or frequent mental health services users, or diagnosed with major mental disorders, behavior disorders, mental retardation, or substance use. Membership in these groups was compared between youth living in rural and urban/suburban counties. Multivariate regression was used to examine factors related to multiple group membership. Findings: Rural youth were more likely to be in groups at high risk for problems transitioning to adulthood, and enrolled in Medicaid as uninsured/uninsurable, compared to their urban counterparts. The strongest factors associated with multiple risk group membership were being in state custody/foster care and receiving Supplemental Security Income (SSI). Conclusions: Services are needed to support the transition to adulthood for youth at high risk of behavioral and adjustment problems. Systems to support coordinated planning and accountability are needed, including data on populations and services, and research on transition-age youth.