Over the past couple of decades, residential special schools in Scotland have faced fundamental changes to the way they operate. This has involved the withdrawal of state funding, a shrinkage of the sector and a situation in which schools now have to sell their services in a market economy in order to survive. This article gives a brief outline of the history and development of residential special education for children considered to be troubled or troublesome. It then draws on an evaluation of one former approved, or List D, school to describe how it managed the transition to the marketplace. Findings from the evaluation are introduced and some implications of these are discussed. It is concluded that the shift from state or local authority funding to private provision may have some advantages. However, it also raises a number of questions as to whether provision for some of society's most damaged children should be determined by market forces.