Foster care is a protective intervention designed to provide out of home placement to children living in at-risk home environments. This study employs prospective longitudinal data (N = 189) to investigate the effects of foster care on the development of child behavior and psychological functioning taking into account baseline adaptation prior to placement and socioeconomic status at the time of placement. Comparisons were made among three groups: children who experienced foster care, those who were maltreated but remained in the home, and children who had not experienced foster care or maltreatment despite their similarly at-risk demographic characteristics. In the current sample, children placed in out of home care exhibited significant behavior problems in comparison to children who received adequate care, and using the same pre- and postplacement measure of adaptation, foster care children showed elevated levels of behavior problems following release from care. Similarly, children placed into unfamiliar foster care showed higher levels of internalizing problems compared with children reared by maltreating caregivers, children in familiar care, and children who received adequate caregiving. Findings suggest that outcomes related to foster care may vary with type of care and beyond the effects associated with maltreatment history, baseline adaptation, and socioeconomic status.