While psychiatric disorders are common among juvenile delinquents, many mental health problems go undetected, increasing the likelihood for persistent difficulties. This is the first known study to examine mental health referral rates and recidivism in the juvenile justice system. In addition to the study, we review juvenile justice mental health screening to improve detection and treatment. Juvenile criminal records in conjunction with behavioral health screenings were analyzed to determine differences in referrals and recidivism among first time offenders. Recidivism rates were significantly lower (p = 0.04) and time to recidivism was significantly longer (p = 0.03) for those referred specifically for mental health services than for those without any referrals, even after adjusting for offense severity. While black youths had a significantly higher recidivism rate (p = 0.02) and a shorter time to recidivism (p = 0.009) than white youths, there was no significant difference between races when referred specifically for mental health services. Among the groups studied, black youths had the most profound positive effect from mental health referrals (p < 0.0001). This study indicates the importance of detecting mental health problems among juvenile delinquents, especially for black offenders. The apparent protective effect of mental health interventions necessitates screening that better identifies underlying psychosocial factors rather than strict reliance upon diagnostic criteria and self-report. Broader or even universal mental health referrals for juvenile offenders could reduce future legal system involvement and costs to society. We review potential reasons that mental health problems go undetected and provide recommendations.