peer reviewed ; Background: Children who grow up in residential care are at high risk for mental health problems. Existing studies have focused on negative mental health indicators and risk factors. There has been less emphasis on identifying protective factors, particularly those associated with positive mental health outcomes. Objective: This study explores positive and negative dimensions of mental health and their links to risk and protective factors in children who have experienced early adversity and trauma and have been placed in residential care. Participants and settings: Children aged 11 to 18 (N =264) were recruited from residential care homes in Luxembourg, a small, high-income European country. Methods: The children completed self-report questionnaires on mental health, perceived stress, school pressure, and participation. Residential care workers provided information on demographic factors, developmental and care history, and pre-care experiences of early adversity and trauma. Results: Confirmatory factor analysis indicated that subjective well-being, internalising problems, and externalising problems are separate yet interconnected components of mental health. Multiple Indicators Multiple Causes models showed that individual, contextual, and psychosocial predictors contribute differentially to positive and negative mental health outcomes. Conclusions: Using a national sample of children in residential care in Luxembourg, this research indicates that subjective well-being, internalising problems, and externalising problems are distinct but related aspects of mental health. ‘Child participation’ and ‘school pressure’ displayed strong links with positive mental health outcomes and may serve as a potential path for improving public health interventions for children in care. ; HERO