The study aimed to investigate trends and explanatory factors for socio-economic inequalities associated with disability during the transition to young adulthood. A sample of 2606 participants (56% females and 44% males) was prospectively followed from adolescence to young adulthood. Disability status, age, gender, mental health problems, scholastic competence and social acceptance were measured from the longitudinal survey Young in Norway, while socio-economic indicators such as participants' and their parents' levels of education, annual income, unemployment and welfare benefits were extracted from the National Population Register in Norway. Regression models were applied to estimate associations between disability and socio-economic outcomes. The findings show that disabled adolescents have a significantly greater risk of achieving lower levels of education and are unemployed and over-represented in welfare benefits during the transition to young adulthood. Most of these associations between disability and socio-economic outcomes were explained by mental wellbeing and self-perceptions. The study suggests that interventions addressing mental wellbeing and social competence might reduce the development of socio-economic inequalities among young people with disability.