While existing research has shown higher prevalence of depression among incarcerated youths compared with non-incarcerated youths, none has studied incarceration as a cause of depression. This study suggests that incarceration, in particular placement of youths in adult incarceration, is a factor in developing depression. A records based comparison of depression among youths in different types of incarceration with non-incarcerated youths, controlling for other predictors of depression, namely offence type, family poverty, parents' history of incarceration and demographic profile. Youths in adult placements were significantly more likely to be depressed than youths in juvenile placements and community-based youths. The findings suggest that there are mental health implications against incarcerating youths in adult prisons, a concern that current juvenile justice might not have considered adequately.