The aim of this naturalistic longitudinal study was to examine the effectiveness of individual psychoanalytic psychotherapy in reducing symptoms and improving overall functioning for adolescents with severe mental illness beyond the changes observed with treatment as usual. Changes to family functioning were also examined. Participants at 12 month follow up were 55 of an initial group of 80 Child and Adolescent Mental Health Services patients with complex, severe mental illness (32 female, mean age = 15.11 years). At initial assessment 40 participants were offered psychoanalytic psychotherapy when a psychotherapist became available; 23 accepted and received once- or twice-weekly psychoanalytic psychotherapy for 4-12 months. Out of the initial 57 participants who received Child and Adolescent Mental Health Services treatment as usual, 33 were reassessed at 12 months. Self-reported depressive symptoms, parent-reported social and attention problems and researcher-evaluated overall functioning and family functioning were measured at initial assessment and 12 months later. At 12 months, psychotherapy was associated with a greater reduction in depressive, social and attention problems than treatment as usual, alone, if these problems were initially in the clinical range. There was no effect on participant overall functioning or family functioning. This naturally occurring sample of seriously ill adolescents referred to Child and Adolescent Mental Health Services for assessment were suffering complex mental illness and poor mental health. Empirical evidence is presented that psychoanalytic psychotherapy is an effective addition to Child and Adolescent Mental Health Services treatment as usual for mental illness in adolescence, particularly for more severe and complex cases. The naturalistic study design and participant attrition are possible study limitations.