In this article Chris Beckett and June Thoburn look at an innovative fostering project in Shanghai, which places children from a large children's institution. They consider placement outcomes for 220 children placed over a two-year period. A number of variables are discussed which might impact on placement outcomes, including age, gender, level of disability, length of time spent in the institution and age at time of placement. The length of time spent in institutional care and age at placement were found to be predictors of the placements breaking down during the first few years after placement. Younger children moved quickly into foster homes were most likely to settle there successfully. This finding is in accord with other studies that have found that early institutional care can have adverse long-term consequences for development. This pattern, it is suggested, does not necessarily reflect poor physical care within the institution. It may simply be a consequence of the fact that an environment of this kind cannot provide the kinds of relationships which are necessary for optimal development. The authors believe that looking at placement outcomes for projects of this kind provides a valuable opportunity to learn more about children's vulnerabilities and about the kinds of post-placement support which are needed.