Personality functioning, general psychopathology, and developmental milestones achievement are critical domains in the field of young people’s mental health; however, no prior research has considered these variables jointly or examined the temporal dynamics between them. To fill these gaps, the present study aimed to investigate the longitudinal associations between the above constructs in a clinical sample of Dutch youth. 525 outpatients (72.5% women; age range: 12–26 years, M = 18.8 ± 2.83) diagnosed with different psychological difficulties were recruited from specialized mental health care services in The Netherlands. They completed self-report measures assessing personality functioning, psychopathological symptoms, and the achievement of youth-specific developmental milestones. Data were collected on three occasions within a year and modelled using a Cross-Lagged Panel Model approach. The levels of personality dysfunction, general psychopathology, and developmental milestones achievement were found to fluctuate from one wave to the other. Personality dysfunction and general psychopathology were positively interrelated at each time point, while both constructs were negatively associated with developmental milestones achievement. Importantly, difficulties achieving developmental milestones predicted a worsening in personality functioning 6 months later. This result would suggest that the achievement of developmental milestones precedes personality functioning, supporting the importance of interventions promoting age-adequate functioning in youth.