AimIncreasing rates of mental illness among young people, exacerbated by the negative impacts of COVID‐19, has resulted in growing pressure on available psychiatric resources to meet increasing demand. Inpatient units provide specialist care for young people with the most severe and complex mental disorders but are one of the most expensive models of psychiatric care. The aim of this review is to provide an update on the effectiveness of adolescent and youth mental health inpatient units in improving outcomes to inform the most efficacious use of psychiatric resources.MethodsSystematic searches of PubMed, The Cochrane Library, PsycINFO, EMBASE, and Web of Science were conducted for studies published in English between January 2011 to May 2022. Criteria for selection included participants aged 12–25 years who had been admitted to amental health inpatient unit. Studies were excluded if set in substance abuse or disability specific units, outpatient or forensic settings, or assessed novel interventions.Results23 studies were identified as meeting inclusion criteria, with most (n = 19) utilizing a pre‐post observational design and reporting improvement across various domains following inpatient treatment. A total of 24 different outcome measures or methods were used meaning a meta‐analysis of results was not possible. There was also a lack of consistency across models of care, lengths of stay, admission policies, and interventions provided.ConclusionInpatient units provide positive outcomes for consumers however a clear understanding of clinical significance and comparison to other treatment settings is lacking.