Foster care is a protective intervention designed to provide out of home placement to children living in at-risk home environments. This study employs prospective longitudinal data~N ϭ 189! to investigate the effects of foster care on the development of child behavior and psychological functioning taking into account baseline adaptation prior to placement and socioeconomic status at the time of placement. Comparisons were made among three groups: children who experienced foster care, those who were maltreated but remained in the home, and children who had not experienced foster care or maltreatment despite their similarly at-risk demographic characteristics. In the current sample, children placed in out of home care exhibited significant behavior problems in comparison to children who received adequate care, and using the same pre-and postplacement measure of adaptation, foster care children showed elevated levels of behavior problems following release from care. Similarly, children placed into unfamiliar foster care showed higher levels of internalizing problems compared with children reared by maltreating caregivers, children in familiar care, and children who received adequate caregiving. Findings suggest that outcomes related to foster care may vary with type of care and beyond the effects associated with maltreatment history, baseline adaptation, and socioeconomic status.The foster care social service system is designed to ameliorate adverse family and environmental conditions that may interfere with typical child development. Currently, the system provides short-and long-term out of home placement to children whose parents are deemed unable to care adequately for them. The effectiveness of foster care as an intervention, however, is the subject of controversy. Throughout the current foster care literature, removing children from their families of origin and placing them in out of home care has been associated with negative developmental consequences that place children at risk for behavioral, psychological, developmental, and academic problems~Curtis, Dale, Kendall, & Rockefeller, 1999!, although rigorous empirical investigations of the sequelae of foster placement are limited.The current study addresses limitations in the existing literature by evaluating the direct effects of foster care on behavior problems within a prospective, longitudinal sample of high-risk children and their families. The study examines the impact of foster care on behavior problems and psychological functioning over and above risks associated with baseline developmental adaptation~prior to placement! and socioeconomic status~SES!. We begin by reviewing the history and general characteristics of the foster care system, the potential developmental risks posed for children entering the system, and results of empirical studies related to foster care experience.During 2001