Homelessness poses risks to the health and safety of young adults; particularly among sexual and gender minority (SGM) young adults. The current study sought to better understand service use and perceived safety in community and service settings among SGM and cisgender heterosexual (cis‐hetero) young adults experiencing homelessness. Data come from a mixed‐method, ecological momentary assessment study (n = 80; 43% sexual minority; 10% gender minority) in Los Angeles, California. Participants reported their current location (service vs. nonservice setting) and perceived safety. Multilevel modeling examined associations between identity, location, and perceived safety; qualitative interviews with 20 SGM participants added context to quantitative findings. Overall, service location was associated with greater perceived safety (β = .27, p < .001). Compared to cis‐hetero participants, cisgender sexual minorities (β = −.23, p = .03) and sexual and gender minorities (β = −.50, p = .002) reported lower perceived safety in service settings (vs. nonservice settings). Qualitative interviews revealed themes and subthemes detailing safe/unsafe spaces and interpersonal conflict in the community, and relationships with staff, peers, transphobia, and positive experiences in service settings.