The ever‐growing number of out‐of‐home children in Italy over the last decade has urged an assessment of the available care services. Although foster care is spreading rapidly, many young people are still housed in residential facilities. Reflection on residential care quality has intensified at both a national and an international level. This paper presents the results of a study on residential care facilities for children and young people in the region of Northern Italy (Lombardy). Four dimensions of ‘quality’ are considered: efficiency, effectiveness, participation in planning and intervention, and empowerment of children and their family relationships. The combined effects of these dimensions are defined as ‘relational quality’. The results show that residential care facilities are generally good, while Social Services resources often appear inadequate for interventions aimed at birth families (efficiency). The well‐being of children in residential care facilities is high, even if they tend to move from one facility to another, rarely returning to their birth family (effectiveness). The involvement of children and their families at different stages of the care path is limited (participative approach). Finally, the most critical element is the failure to properly involve birth families (empowerment).