The large contribution of psychiatric disorders to premature death and persistent disability among young people means that earlier identification and enhanced long-term care for those who are most at risk of developing life-threatening or chronic disorders is critical. Clinical staging as an adjunct to diagnosis to address emerging psychiatric disorders has been proposed for young people presenting for care; however, the longer-term utility of this system has not been established.To determine the rates of transition from earlier to later stages of anxiety, mood, psychotic, or comorbid disorders and to identify the demographic and clinical characteristics that are associated with the time course of these transitions.A longitudinal, observational study of 2254 persons aged 12 to 25 years who obtained mental health care at 2 early intervention mental health services in Sydney, Australia, and were recruited to a research register between June 18, 2008, and July 24, 2018 (the Brain and Mind Centre Optymise Cohort).The primary outcome of this study was transition from earlier to later clinical stages. A multistate Markov model was used to examine demographic (ie, age, sex, engagement in education, employment, or both) and clinical (ie, social and occupational function, clinical presentation, personal history of mental illness, physical health comorbidities, treatment use, self-harm, suicidal thoughts and behaviors) factors associated with these transitions.Of the 2254 individuals included in the study, mean (SD) age at baseline was 18.18 (3.33) years and 1330 (59.0%) were female. Data on race/ethnicity were not available. Median (interquartile range) follow-up was 14 (5-33) months. Of 685 participants at stage 1a (nonspecific symptoms), 253 (36.9%) transitioned to stage 1b (attenuated syndromes). Transition was associated with lower social functioning (hazard ratio [HR], 0.77; 95% CI, 0.66-0.90), engagement with education, employment, or both (HR, 0.47; 95% CI, 0.25-0.91), manic-like experiences (HR, 2.12; 95% CI, 1.19-3.78), psychotic-like experiences (HR, 2.13; 95% CI, 1.38-3.28), self-harm (HR, 1.42; 95% CI, 1.01-1.99), and older age (HR, 1.27; 95% CI, 1.11-1.45). Of 1370 stage 1b participants, 176 (12.8%) transitioned to stage 2 (full-threshold) disorders. Transition was associated with psychotic-like experiences (HR, 2.31; 95% CI, 1.65-3.23), circadian disturbance (HR, 1.66; 95% CI, 1.17-2.35), psychiatric medication (HR, 1.43; 95% CI, 1.03-1.99), childhood psychiatric disorder (HR, 1.62; 95% CI, 1.03-2.54), and older age (HR, 1.24; 95% CI, 1.05-1.45).Differential rates of progression from earlier to later stages of anxiety, mood, psychotic, or comorbid disorders were observed in young persons who presented for care at various stages. Understanding the rate and factors associated with transition assists planning of stage-specific clinical interventions and secondary prevention trials.