Objective: The present study tested the hypothesis that improvements in parental sense of competence during multisystemic therapy (MST) lead to positive changes in parenting, which in turn lead to a decrease of adolescent externalizing problems. Mediational models were tested separately for 3 dimensions of parenting (positive discipline, inept discipline, and relationship quality) that are targeted in MST. Each model included "3-path mediation," in which 2 mediators (i.e., changes in parental sense of competence and parenting dimension) intervene sequentially between the independent (i.e., intervention status) and dependent variable (i.e., change in externalizing problems). Method: Participants in this randomized controlled trial were 256 adolescents and their families who received either MST (n = 147) or treatment as usual (n = 109). In addition to pre- and postintervention assessments, 5 monthly within-intervention assessments took place. Results: Both preintervention-postintervention comparison, through analysis of covariance, and comparison of trajectories during intervention, through latent growth modeling, showed that MST enhanced growth in parental sense of competence and positive discipline, led to no deterioration in relationship quality, and resulted in a decrease in adolescent externalizing problems. The results supported a sequential pattern of change for positive discipline: Changes in parental sense of competence predicted changes in positive discipline, which in turn predicted decrease in adolescent externalizing problems. No support was found for mediated effects of inept discipline and relationship quality. Conclusions: The results affirm the importance of directly targeting parental sense of competence and positive discipline in future interventions aimed at decreasing adolescent problem behavior. (Contains 4 figures, 2 tables, and 1 footnote.)