Objective: The problems children have upon entering foster care can potentially explain prior research findings that frequent placement changes are associated with poor outcomes. This study sought to disentangle this cascading relationship in order to identify the independent impact of placement stability on behavioral outcomes downstream. Design/Methods: Placement stability over the first 18 months in out-of-home care for 729 children from the National Survey of Child and Adolescent Well-being was categorized as early stability (stable placement within 45 days), late stability (stable placement beyond 45 days), or unstable (never achieving stability). Propensity scores predicting placement instability based on baseline attributes were divided into risk categories and added to a logistic regression model to examine the independent association between placement stability and behavioral well-being using the Child Behavior Checklist and temperament scores from the National Longitudinal Survey of Youth. Results: Half (52%) of the children achieved early stability, 19% achieved later stability, and 28% remained unstable. Early stabilizers were more likely to be young, have normal baseline behavior, have no prior history with child welfare, and have birth parents without mental health problems. After accounting for baseline attributes, stability remained an important predictor of well-being at 18 months. Unstable children were more likely to have behavior problems than children who achieved early stability across every level of risk for instability. Among low-risk children, the probability of behavioral problems among early stabilizers was 22%, compared to 36% among unstable children, showing a 63% increase in behavior problems due to instability alone. Conclusions: Children in foster care experience placement instability unrelated to their baseline problems, and this instability has a significant impact on their behavioral well-being. This finding would support the development of interventions that promote placement stability as a means to improve outcomes among youth entering care.