A continuous assessment and a categorical diagnosis of the presence of mental health, described as flourishing, and the absence of mental health, characterized as languishing, are proposed and applied to data from the second wave of the Child Development Supplement (CDS–II) of the Panel Study of Income Dynamics (PSID), in which a comprehensive set of subjective well–being items were administered to a sample of 1,234 youth ages 12–18. Flourishing was the most prevalent diagnosis among youth ages 12–14; moderate mental health was the most prevalent diagnosis among youth ages 15–18. Depressive symptoms decreased as mental health increased. Prevalence of conduct problems (arrested, skipped school, alcohol use, cigarette smoking, and marijuana use) also decreased and measures of psychosocial functioning (global self–concept, self–determination, closeness to others, and school integration) increased as mental health increased. Findings suggest the importance of positive mental health in future research on adolescent development.