Adolescents in residential care have an increased risk of developing psychosocial problems, however, not all adolescents are equally vulnerable. This study aims to provide a review and methodological evaluation of current studies, which focus on protective and risk factors associated with the psychosocial adjustment of adolescents in residential care. Relevant literature was searched in five databases and we identified 25 publications, which met the inclusion criteria. Information regarding direct/indirect risk and protective factors was organized at the individual, social and contextual levels for different outcomes. The results showed that risk and protective factors, were mainly social and contextual factors. Moreover, very few individual factors were found to be related to psychosocial adjustment. Qualitative content analysis was used to analyze each study and showed that some data was poorly or inconsistently reported. This review showed that research on risk and protective factors related to adolescents living in residential care is still limited. Therefore, longitudinal studies with high-quality design and power are needed.