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Abstract This paper presents results from the first large‐scale outcome study of American Family Treatment Drug Courts (FTDCs)—specialised courts designed to work with substance‐abusing parents involved with the child welfare system. The paper examines whether court, child welfare and treatment outcomes differed for 301 families served through three FTDCs as compared to a matched sample of 1,220 families with substance abuse issues who received traditional child welfare services. Propensity score weights were used to account for measured differences between the FTDC and comparison groups. Child welfare outcomes were analysed using analytical techniques that controlled for these inherently nested data (i.e. children within a family). Overall, the study found that FTDC mothers had more positive treatment outcomes than similar mothers who were not served by the FTDC. FTDC mothers were more likely to enter substance abuse treatment services than were non‐FTDC mothers, entered treatment more quickly after their initial court petition than did non‐FTDC mothers, spent twice as much time in treatment than did non‐FTDC mothers and were twice as likely to complete at least one treatment episode than non‐FTDC mothers. In addition, data from the study indicate that FTDCs influence a key child welfare variable of interest: FTDC children were significantly more likely to be reunified with their mothers than were unserved children. Copyright © 2008 John Wiley & Sons, Ltd.