The objective of this study was to examine the association between community adversity and psychotropic use among children in foster care in one US state. This study uses a cross-sectional design integrated foster care and Medicaid administrative data with data from Kids Count, the US Census, and the Area Health Resource File. There were 4,334 children ages 5–18 in foster care in 2014. We used K-means cluster analysis grouped state counties using indicators of school performance, juvenile justice involvement, and food insecurity. Chi-square tests assessed significance between psychotropic medication and community adversity cluster. A generalized linear mixed model assessed the relationship between psychotropic use and community adversity cluster, accounting for individual-level and cluster-level factors. Children in foster care living in high adversity communities were significantly less likely to use psychotropic medication (p < .0001). Future research can investigate the specific community factor influencing judicious use of psychotropic medication and the impact on children outcomes.