Home Treatment (HT) in child and adolescent psychiatry is an increasingly important topic in the current context of global crises and strained mental health systems. We implemented a HT program provided by a multiprofessional treatment team and compared long-term outcomes of 27 patients (48% female, Ø15.15 ± 2.77 years) with those of 48 patients (69% female, Ø16.35 ± 2.87 years) who received inpatient treatment as usual (I-TAU). Psychopathology was assessed using the Health of the Nation Outcome Scale for Children and Adolescents (HoNOSCA[-SR]) and psychosocial functioning was assessed using the Global Assessment of Functioning (GAF) at admission, discharge, and 18-24 months after discharge. Treatment outcomes were analyzed using mixed models. The results showed that patients in the HT arm had significantly lower HoNOSCA scores at follow-up (β = -4.25 [95%CI: -7.64 to -0.86], SE = 1.73, p = 0.014) and higher GAF scores (β = 12.09 [95%CI: 4.48 to 19.70], SE = 3.88, p = 0.002) compared to those in the I-TAU arm. No significant differences were observed in HoNOSCA-SR scores (β = -2.46 [95%CI: -9.16 to 4.30], SE = 3.43, p = 0.48) and readmission rates (OR = 1.23 [95%CI = 0.47 to 3.20], p = 0.67). These results highlight the potential of HT in improving long-term functional and psychopathological outcomes in youth mental health. HT may be an equally effective and even more sustainable type of treatment for child and adolescent mental disorders. The trial was preregistered at the German Clinical Trials Register (DRKS00025424, 05/27/2021).