The psychosocial development of 16 boys placed in permanent substitute families between the ages of 5 and 9 was examined at 1, 12, 60 and 96 months into placement. Conduct and emotional problems fell significantly over the first year but relationship difficulties and overactivity changed little. There was no significant change beyond 12 months. By 8 years, 19% of placements had disrupted and 15% of the remainder had a poor outcome. The level of preplacement adversity predicted poor or disrupted outcomes, but outcomes for those with high adversity were better when parenting was very positive.