This article describes developments in residential childcare services in Scotland and the influence of various policy trends; in particular, it draws on the work of the National Residential Child Care Initiative, a major government-led review that reported in 2009. The development of small-scale residential units, the emergence of a ‘mixed economy’ of provision and a focus on staff training are key features of residential care for children in Scotland. The sector has received strong central government affirmation for two decades, notwithstanding a gradual reduction in its overall size. The article focuses on developments over the past 10 years and identifies a number of ‘drivers’ that aim to promote improvement, including staff training and the promotion of interprofessional collaboration. The emergence of specialist education and health services for ‘looked after children’ is noted. The relative underemphasis, until recently, on specific theories of care or particular therapeutic approaches is considered. Constraints on improvement are also considered; these include the fragmentation of provision and the operation of markets, the pressure on places and a high level of placement breakdown.