Background Admission rates to child and adolescent mental health inpatient units in Germany are substantial (58.831 admissions in 2019). Historically, different treatment pathways have not been available. The evidence suggests that home treatment could be an alternative. The objective of this study was to assess the long‐term stability of treatment gains among children and adolescents treated for serious mental health problems with home treatment (HT) as compared with inpatient treatment‐as‐usual (TAU). Methods Hundred patients were enrolled and randomized into an intervention (HT n = 54) and control group (TAU n = 46). Follow‐up data were available after 8.4 months (n = 78) (T3) and after 4.3 years (n = 51) (T4). The primary outcome measured was overall level of functioning, for which the Children’s Global Assessment Scale (CGAS) was used. Secondary outcomes included severity of patient impairment and parental competency in dealing with their child's symptoms, measured using the Health of the Nation Outcome Scales (HoNOSCA). A qualitative interview with parents was performed at T3 and T4. Results Treatment effects remained stable for both groups at T3 and T4 (p < .001). After 4.3 years 70% of the parents in the intervention group stated satisfaction with the treatment received, while only 36.8% of the parents within the control group rated themselves as satisfied. 43.7% of parents in the home treatment group reported that the most helpful aspect of this pathway was the prompt and intensive professional help and advice they received as primary caregivers at home. Conclusions Home treatment may be considered a viable alternative to inpatient care.