This literature review was undertaken as part of the National Mental Health Strategy on the development and maintenance of a national early intervention network for mental health in young people. Its purpose is to facilitate the development of innovative early intervention services across Australia by developing and maintaining a national network of mental health service providers; consumers; carers; researchers and policymakers; as well as an information clearinghouse. The review aims to critically examine the concept of early intervention for a broad audience and to explore its application in the area of mental health of young people. It seeks to provide an international review about: (1) the rationale for early intervention in mental disorder in young people; (2) the underlying conceptual framework; (3) the concept of prevention; (4) the presentation of a models of prevention; (5) research analysis; (6) an overview of evidence on effectiveness of this approach; and (7) the implications arising from the review. (Contains 281 references.) (JDM)