Objective This study examined the role of youth race, youth-therapist racial matching, and youth-reported therapist cultural understanding on early treatment engagement in mental health services. Method The sample included 1158 youths and 126 therapists. Approximately four weeks after the first therapy session, youths responded to a survey assessing five engagement dimensions. Cultural understanding was assessed by asking youths to rate within that questionnaire the extent their therapist “understands their culture and values.” Three multivariate multiple regression models were conducted to assess the associations of race, racial matching, and cultural understanding with treatment engagement. Results Youth race and racial matching were not significant predictors of treatment engagement, whereas youth-reported therapist cultural understanding was a significant predictor of engagement. Cultural understanding had the highest average effect size across all treatment engagement dimensions (ηp 2 = .36) compared with youth race (ηp 2 = .00) and racial matching (ηp 2 = .00). Race was examined as a moderator of the effects of racial matching and cultural understanding on treatment engagement and did not yield significant effect sizes. Conclusions Findings suggest that increasing therapists’ cultural understanding of their youth clients may be a promising strategy for engaging youths early in mental health services.