Objectives Despite the significant mental health challenges and unique treatment needs of transgender and gender diverse (TGD) youth, research on the acceptability of evidence-based treatments for these youth is limited. To address this gap, the current study explored the perceived relevance of dialectical behaviour therapy (DBT) for high-risk TGD youth. Methods Qualitative data were collected from six focus group discussions with a purposive sample of 21 TGD youth aged 18–25 years old who endorsed a history of depression, suicidality or self-harm and individual interviews with 10 mental health treatment providers with prior DBT and TGD client experience. The data were analysed inductively using thematic content analysis. Results The results highlighted the perceived relevance of DBT in targeting chronic and acute stressors, some of which are unique to TGD youth such as issues related to gender dysphoria, hormone-related treatment and gender identity. Possible areas for treatment modifications including the adaptation of body awareness exercises and physiological-related coping techniques for youth experiencing gender dysphoria, and the reinforcement of self-care skills, were identified. While interpersonal effectiveness skills were acknowledged as important, treatment providers highlighted a need to prioritize safety over the practice of these skills. This is because TGD youth often experience more hostile and prejudiced interpersonal experiences than their cisgender peers. Conclusion The study's findings shed light on previously unexplored perspectives of TGD youth and treatment providers on the perceived relevance of DBT and provide treatment providers and implementation researchers with some critical issues to consider when working with high-risk TGD youth.