We examined Treatment Foster Care (TFC) in residential trajectories for youth with psychiatric disorders and aggressive behavior. We analyzed residential placements of a statewide sample of youth during the 12 months preceding and following admission to TFC. Prior to TFC, the majority of youth were residing in more restrictive settings (group homes or residential treatment). Two-thirds of youth remained in TFC throughout the follow-up year. Of those who left, nearly half returned home, and slightly fewer were discharged to group homes. By the end of the 12-month follow-up period, rates of group home use were similar to those seen in the pre-TFC period. Movement out of TFC during the year was associated with being older at placement and with increased problem behavior (particularly externalizing behaviors). TFC serves as a step-down placement for a substantial number of youth. However, this is not the only way it is used, and models based on short-term transitioning or reunification with families may not be widely implemented or relevant in practice. Additional research is needed to understand current functions of TFC in residential trajectories and to maximize its utility in systems of care.