Underpinned by stage-environment fit and job demands-resources theories, this study examined how adolescents' anxiety, depressive symptoms, and positive functioning developed as they transferred from comprehensive school to further education, employment or training, or became NEET (not in education, employment, or training), at age 16 years, in the longitudinal English national cohort study Next Steps (N = 13,342). Controlling for childhood achievement, socioeconomic status, ethnicity, and gender, we found that NEET adolescents had the largest losses in mental health. This pattern was similar to adolescents staying on at school who had increased anxiety and depression, and decreased positive functioning, after transition. In comparison, adolescents transferring to full-time work, apprenticeships, or vocational college experienced gains in mental health.