Background: High prevalence rates of psychiatric morbidity have been documented among adolescents within youth correctional institutions in Nigeria. However, there has not been prior investigation to determine the capacity for and nature of mental health services being provided in these institutions. Objectives: To assess psychiatric morbidity among adolescents within youth correctional institutions in Lagos, while simultaneously examining the capacity for and the scope of mental health services. Methods: Psychiatric morbidity and alcohol/substance use disorder were assessed among 165 respondents using the Strengths and Difficulties Questionnaire, and the CRAFFT screening tool for adolescent substance use disorder. Availability of mental-health services in the institutions was examined using an ‘audit protocol’. Results: We found prevalence rates of 18.2% and 15.8% of general psychiatric morbidity and alcohol/ substance use disorder, respectively, among the adolescents. Only about a third (34.3%; n = 20) of the operational staff at the institutions had educational backgrounds relevant to psycho-social services for children/adolescents, while less than a quarter (22.4%, n = 13) has ever received any training in child mental health services. There was no evidence of mental health screening and intervention in the service framework within the institutions. Conclusions: We concluded that there was evidence for significant mental health service gaps within the youth correctional services in Lagos.