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The family instability hypothesis has been researched among the general population as well as among African American and Mexican American populations, but not yet among Indigenous families. The purpose of this research was to examine whether experiencing separations from their caretakers (lasting at least one month), and the types of living arrangements that follow, affect Indigenous adolescents’ risk of meeting criteria for an internalizing, externalizing, or substance use disorder. Diagnostic criteria were assessed in Wave 6 using the Diagnostic Interview Schedule for Children-Revised (DISC-R). The hypothesis that as the number of lifetime separations increases, the risk of meeting criteria for each of these three disorders also increases was tested using six waves of data from a sample of 572 Indigenous adolescents. The type of environments that adolescents moved into after separations that occurred during the study were assessed and categorized as either an always normative (relative care) or at least one non-normative (non-kin foster care or institutional settings) environment. Logistic regression results showed very little support for the family instability hypothesis, since the number of lifetime caretaker separations was not significantly related to meeting criteria for any type of disorder. However, this study found that moving into at least one non-normative environment after a separation experienced during the study was associated with higher odds of meeting criteria for externalizing or substance use disorders, but moving into normative environments after each separation did not significantly affect any of the three types of disorder diagnosis. This study found strong evidence that Indigenous adolescents benefit when extended family fill the primary caregiving role in the absence of the primary caretaker. The important programming and policy implications are discussed.