BACKGROUND: 'Optimal outcomes' of child and adolescent psychiatric disorders may mean the best possible outcome, or the best considering a child's history. Most research into the outcomes of child and adolescent psychiatric disorder concentrates on the likelihood of adult illness and disability given an earlier history of psychopathology. METHODS: In this article, we review the research literature (based on a literature search using PubMed, RePORT and Google Advanced Scholar databases) on including optimal outcomes for young people with a history of anxiety, depression, attention-deficit/hyperactivity disorder, conduct disorder, oppositional defiant disorder, or substance use disorders in childhood or adolescence. We consider three types of risks that these children may run later in development: future episodes of the same disorder, future episodes of a different disorder, and functional impairment. The impact of treatment or preventative interventions on early adult functioning is briefly reviewed. RESULTS: We found that very few studies enabled us to answer our questions with certainty, but that in general about half of adults with a psychiatric history were disorder-free and functioning quite well in their 20s or 30s. However, their chance of functioning well was less than that of adults without a psychiatric history, even in the absence of a current disorder. CONCLUSIONS: Among adults who had a psychiatric disorder as a child or adolescent, about half can be expected to be disorder-free as young adults, and of these about half will be free of significant difficulties in the areas of work, health, relationships, and crime. Optimal outcomes are predicted by a mixture of personal characteristics and environmental supports.