This study examined Florida Medicaid mental health expenditures for children in out-of-home care. Child welfare and Medicaid administrative databases were analyzed using two-part models to identify characteristics associated with expenditures. Mental health expenditures were higher for older children, boys, children who were abused or lost their caregivers, or with a longer length of stay in out-of-home care. In contrast, African American children were less likely to have positive expenditures than White children, but among youth with positive expenditures, African Americans had higher expenditures. In addition, among youth with positive expenditures, substance use and affective disorders were associated with higher expenditures.