Family involvement in the planning and execution of mental health treatment has been shown to positively influence child outcomes; however, there is wide variability in the levels of involvement by families. The current study investigated the influence of child, family caregiver, service system, and community factors on the level of family involvement in the mental health treatment of children with severe emotional disturbances (SED). Although prior work in this area has primarily focused on family and child characteristics, the current study adds to the knowledge base by also exploring factors associated with the quality of service delivery that may influence levels of family involvement. The current study is a secondary analysis of existing data from the Impact Study of Medicaid in Mississippi and Tennessee that used in-depth interviews with parents and case review ratings. A total of 136 children and adolescents who received Medicaid coverage for mental health treatment in Mississippi and Tennessee were the focus of this study that assessed child and caregiver characteristics at the beginning of the study and rated service system factors 6 months after the study began. Results of the multiple regression analysis revealed the quality of the service delivery system had the most influence on the level of family involvement. Results suggest that levels of family involvement may have less to do with caregiver health, or other family characteristics, and more to do with the quality of the service delivery system.