The research described in this dissertation concerns the living environment (social climate) in Norwegian therapeutic residential youth care (TRC). This is an intensive (24/7) and specialized form of youth care that is used for youths with serious psychosocial problems, and only when all other options, including foster care, have been unsuccessful. Social climate was the central aspect of this study because a good living environment is a basic condition for good mental health, quality of life, autonomy, and personal growth of young persons. However, little was known about which determinants (youth and organizational characteristics) contribute to a positive social climate and how these determinants via social climate are associated to treatment outcomes (quality of life). This dissertation aimed to investigate the relationships between these factors. First, the results showed that social climate can reliably and validly be measured with a short instrument in TRC. Next, the results showed that there is evidence for two types of organizations (family-style TRC and larger TRC-settings) and four youth groups (youth with severe problems, with incidental problems, with family problems, and youth with a migrant background). There were few differences between the two types of organizations regarding social climate and quality of life, but significant differences depending on youth groups. Youth with family problems experienced a more involved social climate in family-style TRC compared to a larger TRC-setting. Youth with severe problems evaluated the social climate and their quality of life structurally more negative, while youth with a migrant background evaluated the social climate and their quality life most positively. The results also showed that a positive social climate can be a protective factor for a good quality of life for youth with severe problems, with incidental problems, and youth with a migrant background. Especially for youth with severe problems, a positive social climate in TRC can contribute to a higher quality of life, buffering the influence of their problems. In conclusion, this research emphasizes the importance of a good living environment (care) in combination with good treatment (cure). We also conclude that, despite the presence of mental health problems, youth still can experience a relatively good quality of life. This research provides indications for a development towards therapeutic care, where care and cure are integrated as much as possible in order to contribute to positive outcomes for young people living in TRC.