Importance: Transgender youth, including adolescent and young adult transgender women assigned a male sex at birth who identify as girls, women, transgender women, transfemale, male-to-female, or another diverse transfeminine gender identity, represent a vulnerable population at risk for negative mental health and substance use outcomes. Diagnostic clinical interviews to assess prevalence of mental health, substance dependence, and comorbid psychiatric disorders in young transgender women remain scarce. Objective: To report the prevalence of mental health, substance dependence, and comorbid psychiatric disorders assessed via clinical diagnostic interview in a high-risk community-recruited sample of young transgender women. Design, Setting, and Participants: Observational study reporting baseline finding from a diverse sample of 298 sexually active, young transgender women aged 16 through 29 years (mean age, 23.4 years; 49.0% black, 12.4% Latina, 25.5% white, and 13.1% other minority race/ethnicity) and enrolled in Project LifeSkills, an ongoing randomized controlled HIV prevention intervention efficacy trial in Chicago and Boston, between 2012 and 2015. Exposure: Transfeminine gender identity. Main Outcomes and Measures: Age- and site-adjusted prevalence and comorbidities of mental health and substance dependence disorders assessed via the Mini-International Neuropsychiatric Interview, including 1 or more diagnoses, 2 or more comorbid diagnoses, major depressive episode (current and lifetime), past 30-day suicidal risk (no/low risk vs moderate/high risk), past 6-month generalized anxiety disorder and posttraumatic stress disorder, and past 12-month alcohol dependence and nonalcohol psychoactive substance use dependence. Results: Of the 298 transgender women, 41.5% of participants had 1 or more mental health or substance dependence diagnoses; 1 in 5 (20.1%) had 2 or more comorbid psychiatric diagnoses. Prevalence of specific disorders was as follows: lifetime and current major depressive episode, 35.4% and 14.7%, respectively; suicidality, 20.2%; generalized anxiety disorder, 7.9%; posttraumatic stress disorder, 9.8%; alcohol dependence, 11.2%; and nonalcohol psychoactive substance use dependence, 15.2%. Conclusions and Relevance: Prevalence of psychiatric diagnoses was high in this community-recruited sample of young transgender women. Improving access to routine primary care, diagnostic screening, psychotherapy, and pharmacologic treatments, and retention in care in clinical community-based, pediatric, and adolescent medicine settings are urgently needed to address mental health and substance dependence disorders in this population. Further research will be critical, particularly longitudinal studies across development, to understand risk factors and identify optimal timing and targets for psychosocial interventions.