Objectives This study examined the effects of individual and contextual factors on reentry into out-of-home care among children who were discharged from child protective services in fiscal year 2004–2005. The objectives were to: (1) examine individual and contextual factors associated with reentry, (2) explore whether there are meaningful groups of youth who differ in terms of risk for reentry, and (3) determine whether relatively homogeneous clusters of child welfare agencies, based on contextual characteristics, differ significantly in terms of the reentry rates of the children whom they serve. Method The study design involved a multilevel longitudinal analysis of administrative data based on an exit cohort. Two Cox proportional hazards multilevel mixture models were tested. The first model included multiple individual level predictors and no agency level predictors. The second model included both levels of predictors. Results The results of multilevel Cox regression mixture modeling indicated that at the individual level, younger age, being placed in out-of-home care because of neglect and having physical, health problems corresponded to a decreased likelihood for reentry. At the agency level, lower average expenditures per child and contracting out case management services were associated with faster reentry into out-of-home care. Conclusions This study demonstrates that children who reenter out-of-home care appear to be a homogeneous population and that reentry is associated with both contextual factors and individual characteristics. Practice implications The most important implication that can be drawn from the study findings is that reentry may be most effectively prevented by focusing on such factors at the organizational level as contracting out case management services and funding allocation. Child welfare agencies that are responsible for an array of services and decide to contract out case management should consider the use of performance-based contracts and emphasize and strengthen quality assurance approaches for contracted services. In addition, to compensate for lower funding allocated for children served in out-of-home care, child welfare workers should become more familiar with community resources and help connect families to these supports.