Health departments in the new South Africa are undergoing major restructuring and, in some cases, severe financial cutbacks as new policies attempt to redress the inequities of the past. A district system is being phased in, with a shift in funding from academic hospitals to secondary and primary level care. The process is being undermined by the current recession, which also affects Welfare and Education facilities, and by widespread poverty, violence, and other adverse conditions. Child mental health services are discussed in the light of current human resources, epidemiological data, the effects of violence and cultural issues, together with some reflections on their future.