The current study explores discharge destinations, length of stay, and reasons for return to residential treatment for youth transferred from a residential treatment center (RTC) to a group home. Four entry cohorts (60 boys) were followed from admission through discharge. Results demonstrated that over half of the young persons went to a lower level of care from the group home, indicating that the group home functioned as an intermediate level in the continuum of care. Specifically, 20 young persons went to a family, relative or foster home and 16 went to a supervised independent living program or were discharged to self. A subset of the subjects returned to the RTC after exhibiting emotional and behavior problems. Taken together, these results have important public policy implications for understanding and enhancing the role of group homes in the continuum of care. (Contains 6 tables and 2 notes.)