Objective: This longitudinal, prospective study examines the role of specialty mental health care as provided by community-based, usual-care practice settings in predicting out-of-home placements among children served by a child welfare and juvenile justice system. Method: The mental health needs of 1,249 children from 22 counties in Tennessee were assessed when the children were referred for child welfare and juvenile justice, in-home, case management services. The outpatient specialty mental health care received by the children in the 6-month period following the referral was recorded using the Service Assessment for Children and Adolescents and reimbursement records of TennCare. Children were then followed for 1.5 years to identify those who were subsequently placed in out-of-home care. Results: A majority of the children needed specialty mental health care, but most of these children did not receive it. This is important because their need was the best predictor of subsequent out-of-home placement. The odds of an out-of-home placement in the follow-up period were reduced by 36% to 40% for those children who received specialty mental health care. Conclusions: Improved systematic screening for mental health problems and access to specialty mental health care for children referred for in-home child welfare and juvenile justice case management services are promising strategies for reducing out-of-home placements. (Contains 5 tables.)