How best to support children and young people in foster care remains a challenge for child welfare. There has been little Australian research on the outcomes for children and young people placed in therapeutic foster care (TFC). This article aims to address this knowledge gap, presenting the evaluation of a state‐wide model of TFC known as the Circle Program operating in Victoria, Australia. Data sources for the study were case assessment analysis; surveys of foster carers, program workers and other stakeholders in the sector; and both focus groups and individual interviews with foster care workers. The evaluation found that the Circle Program lessened the number of unplanned exits of children from foster placements compared with generalist foster care. Another important finding was that the Circle Program positively influenced foster carers' decisions to stay in the carer role. Key components perceived as contributing to outcomes of the Circle Program included enhanced training of foster carers, intensive carer support, specialist therapeutic support to the child and carer, therapeutic service to family members and a network of services to provide support to the child.