Background Adverse childhood experiences (ACEs) have been consistently linked to psychiatric difficulties in children and adults. However, the long-term effects of ACEs on mental health during the early adult years have been understudied. In addition, many studies are methodologically limited by use of non-representative samples, and few studies have investigated gender and racial differences. The current study relates self-reported lifetime exposure to a range of ACEs in a community sample of high school seniors to three mental health outcomes–depressive symptoms, drug abuse, and antisocial behavior–two years later during the transition to adulthood. Methods The study has a two-wave, prospective design. A systematic probability sample of high school seniors (N = 1093) was taken from communities of diverse socioeconomic status. They were interviewed in person in 1998 and over the telephone two years later. Gender and racial differences in ACE prevalence were tested with chi-square tests. Each mental health outcome was regressed on one ACE, controlling for gender, race/ethnicity, and SES to obtain partially standardized regression coefficients. Results Most ACEs were strongly associated with all three outcomes. The cumulative effect of ACEs was significant and of similar magnitude for all three outcomes. Except for sex abuse/assault, significant gender differences in the effects of single ACEs on depression and drug use were not observed. However, boys who experienced ACEs were more likely to engage in antisocial behavior early in young adulthood than girls who experienced similar ACEs. Where racial/ethnic differences existed, the adverse mental health impact of ACEs on Whites was consistently greater than on Blacks and Hispanics. Conclusion Our sample of young adults from urban, socio-economically disadvantaged communities reported high rates of adverse childhood experiences. The public health impact of childhood adversity is evident in the very strong association between childhood adversity and depressive symptoms, antisocial behavior, and drug use during the early transition to adulthood. These findings, coupled with evidence that the impact of major childhood adversities persists well into adulthood, indicate the critical need for prevention and intervention strategies targeting early adverse experiences and their mental health consequences.