This paper presents the psychometric evaluation of the Satisfaction with Life Scale (SWLS; Diener et al. in J Personal Assess 49:71-75, 1985) used with a large sample (N = 610) of caregivers for youth receiving mental health services. Methods from classical test theory, factor analysis, and item response theory were utilized. Additionally, this paper investigated whether caregiver strain mediates the effect of youth symptom severity on caregiver life satisfaction (N = 356). Bootstrapped confidence intervals were used to determine the significance of the mediated effects. Results indicated that the SWLS is a psychometrically sound instrument to be used with caregivers of clinically-referred youth. Mediation analyses found that the effect of youth symptom severity on caregiver life satisfaction was mediated by caregiver strain but that the mediation effect differed based on the type of youth symptoms: caregiver strain was a partial mediator when externalizing symptoms were measured and a full mediator when internalizing symptoms were measured. Implications for future research and clinical practice are discussed.