The early adult functioning of 89 women from inner London who had been reared in residential Children's Homes was compared with that of 41 women sampled from the general population of the same area. The behaviour of both groups had previously been studied in middle childhood by means of standardized questionnaires. The adult assessment comprised detailed standardized interviews with the women and with their spouses, together with systematic observations of mother‐child interaction in the home for those with 2–3 1/2‐year‐old children. The adult outcome of the institution‐reared women as a whole was substantially worse than that for the comparison group, but the course of their personality development had been greatly modified by positive school experiences in childhood and by the characteristics of their spouse and marriage in adult life. The institution‐reared women in good psychosocial circumstances in adulthood functioned as well as the comparison group women. The findings are interpreted in terms of direct and indirect effects of experiences leading to both continuities and discontinuities in social development.