This study examined placement stability (planned discharge) among 8,933 children and adolescents admitted into residential treatment facilities in California. Reducing multiple placements among foster children is a concern for child welfare agencies due to increased emphasis on federal and state outcomes and accountability standards. The results of this study indicated that high-level (intensive) residential programs achieve the greatest placement stability and that stability worsens as the level of care decreases. Placement stability is also a significant clinical concern as children who are subject to unplanned discharge demonstrate a worsening of behavioral functioning. Finally, although there is a reluctance to place children into high-level residential facilities and children are generally first required to fail lower level programs, the results of this study indicated that when properly assessed and placed into the appropriate level of care at the outset, the majority of children exit the residential care system altogether and return home or to home-like settings sooner and at a lower cost. (Contains 4 figures.)