OBJECTIVE:This study describes the process of choosing a clinical outcome measure for a statewide performance outcome system for children receiving publicly funded mental health services in California. METHODS:The recommendation is based on a five-phase approach, including an environmental scan of measures used by state mental health agencies; a statewide provider survey; a scientific literature review; a modified Delphi panel; and final rating of candidate measures by using nine minimum criteria informed by stakeholder priorities, scientific evidence, and state statute. RESULTS:Only 10 states reported use of at least one standardized measure for outcome measurement. In California, the most frequently reported measures were the Child and Adolescent Needs and Strengths (CANS) (N=33), the Child Behavior Checklist (N=14), and the Eyberg Child Behavior Inventory (N=12). Based on modified Delphi panel ratings, only the Achenbach System of Empirically Based Assessment, the Strengths and Difficulties Questionnaire, and the Pediatric Symptom Checklist (PSC) were rated on average in the high-equivocal to high range on effective care, scientific acceptability, usability, feasibility, and overall utility. The PSC met all nine minimum criteria for recommendation for statewide use. In its final decision, the California Department of Health Care Services mandated use of the PSC and CANS. CONCLUSIONS:There is a lack of capacity to compare child clinical outcomes across states and California counties. Frequently used outcome measures were often not supported by scientific evidence or Delphi panel ratings. Policy action is needed to promote the selection of a common clinical outcome measure and measurement methodology for children receiving publicly funded mental health care.