The consequences for youth with mental illness are particularly acute and many experience crises that precipitate admission to hospital. When these youth are discharged, continuity of care is a key factor in a positive transition experience. Following discharge, youth require a form of social scaffolding to help them transfer their adaptive coping and self-regulation skills from the cool cognition of the hospital to the potentially hot cognition of their community. Recent research on the brain has demonstrated the importance of neuroplasticity during the period between the onset of puberty and adulthood. This period may be viewed as a window of both risk and opportunity. Risk, because the young person’s ability to make rational decisions is often adversely affected by his or her intense emotions. Opportunity, because the rapid growth of the brain during adolescence is strongly affected by the youth’s social environment, and this growth does not wane until after young adulthood. Thus, an understanding of the process of self-regulation of youth with mental illness in the context of discharge is essential for a successful discharge transition program. And yet, literature on the process of self-regulation in the context of discharge from the perspective of youth with mental illness is lacking. Using a grounded theory approach, this research study revealed the challenges and strengths experienced by youth in this process. Potential implications for practice included identifying and implementing strategies for addressing gaps in current programs, and directions for future research were discussed.