The prospective study set out to investigate gender differences, psychosocial and cognitive functioning, self-image, and changes in these structured parameters, and the role of working alliance. More girls than boys were admitted to inpatient care. Mood and conduct disorders were the most common diagnoses. Girls more commonly had poor family relationships but more peers than boys. Violent and destructive behaviour were more common among boys, and they performed worse in tests assessing nonverbal cognitive performance and total immediate recall memory than girls. Both girls and boys had an impaired IQ at entry. Major impairment in functioning in several areas such as school, family relations, judgement and thinking was found among both genders.