Despite mental disorders being the dominant health issue confronting young people, youth mental health is yet to be recognised as a discrete, unified program area; responsibility for young people's mental health is currently split across multiple levels of government. Public specialist mental health services have followed a paediatric-adult split in service delivery, mirroring general and acute health care. The pattern of peak onset and the burden of mental disorders in young people means that the maximum weakness and discontinuity in the system occurs just when it should be at its strongest. Young people need youth-friendly services that recognise and respond to their special cultural and developmental needs. At the primary and community level, headspace: the National Youth Mental Health Foundation, is a national response to this and aims to provide better access, engagement and enhanced multidisciplinary care for young people across Australia. The specialist mental health service level should be complemented by youth-specific specialist mental health services for young people, aged 12-25 years, which would strengthen the existing system with a better targeted stream of care, providing access to integrated mental health, substance use, and vocational-recovery services. Alternative approaches to creating this capacity should be urgently developed and evaluated, and sustained reform informed by evidence as well as values.