Young people leaving state out-of-home care are among the most disadvantaged and vulnerable young Australians, and a substantial proportion experience mental health issues. This article reviews the literature relating to the mental health of care leavers, highlighting the gaps in the current Australian research base. Available studies indicate that mental health issues may worsen during the transition from care, yet mental and emotional health may also be neglected during this stressful period. Furthermore, care leavers with mental health issues are highly vulnerable to poor post-care outcomes, particularly homelessness. Implications for policy and research are discussed.