This article sets out some of the evidence of the impact of institutionalisation on children in Europe. It explores the human rights legislative and policy framework underpinning institutionalisation and outlines areas that require development. It assesses some of the most recent advances in policy and action to address the issue and makes recommendations for transforming systems of health, education and social protection services for children and families, in order to end the institutionalisation of children. In addition to published academic research, the article draws on the results of Lumos’ research into placements of children in residential institutions in a number of countries.