Youths in Japanese residential care institutions often face challenges with social adaptation and career trajectories. This study aimed to examine the risk factors that lead residential care youths in Japan to drop out of high school. Eighty-nine residential care facilities completed a questionnaire that focused on the characteristics of residing high school students, their educational status, experiences of maltreatment before residence, diagnosed disabilities, and the timing of admission. A sample composed of 773 youths was analyzed. Among the facilities, the high school dropout rate among youths in residential care was 19.3% (n = 149). Data revealed that the time of admission had the utmost significant effect. The risk of dropping out for youths admitted at junior high school age was significantly higher than for youths admitted before that age. Overall, residential care youths had a higher risk of not adapting to high school, and youths receiving short-term care demonstrated difficulty continuing high school. These results illustrate the importance of psychological treatment and educational support for youth who enter residential care during adolescence. Hence, attention should be focused on improving youth engagement in school to improve their social and career outcomes.