KidsMatter Early Childhood (KMEC) is a mental health promotion and early intervention initiative developed for early childhood services. It provides a framework for services to plan and implement evidence-based strategies to improve the mental health and wellbeing of children from birth to school age, based on four risk and protective factors: 1) Creating a sense of community, 2) Developing children's social and emotional skills, 3) Working with parents and carers, and 4) Helping children who are experiencing mental health difficulties. In 2010-2011 the initiative was trialled with over 5,000 children from 111 long day care services and preschools across Australia. This report presents the findings, methodology, and recommendations of the evaluation of KMEC. The evaluation examined implementation quality; impact on services and staff; impact on families and parents; and impact on children; with regard to the outcomes of better meeting the needs of children with difficulties; improved staff-child closeness; improved child temperament; and reduced mental health difficulties. Data from the Longitudinal Study of Australian Children was used for comparison.