Extant research on youth in welfare systems has concentrated mostly on the so called “Deficit Model” which limits our understanding of the individual experiences, strengths, and capacities that are unique to these youth (Sullivan, Jones, & Matiesen, 2010). The current study explores the emotional wellbeing of a group of youth in the foster care system using Grounded Theory and Thematic Analysis as a methodological base (Focus Groups N=15). Results identified five central factors for emotional wellbeing: adaptation, resources, construction of relationships, development of positive mental health, and resiliency. Results from the current study generate new knowledge on central factors pertaining emotional wellbeing which have only been scarcely examined in the current research on foster youth and which warrant further attention.