Small studies suggest that prescription stimulants can precipitate psychosis and mania. We conducted a population-based case-crossover study to examine whether hospitalization for psychosis or mania was associated with initiation of stimulant therapy. Between October 1, 1999 and March 31, 2013, we studied 12,856 young people who received a stimulant prescription and were subsequently hospitalized for psychosis or mania. Of these, 183 commenced treatment during 1 of 2 prespecified 60-day intervals (defined as the “risk interval” and “control interval,” respectively) prior to admission. We found that stimulant initiation was associated with an increased risk of hospitalization for psychosis or mania in the subsequent 60 days (odds ratio, 1.86; 95% confidence interval, 1.39–2.56). The risk was marginally higher in patients treated with antipsychotic drugs (odds ratio, 2.06; 95% confidence interval, 1.38–3.28), but remained in patients with no such history (odds ratio, 1.66; 95% confidence interval, 1.09–2.66). One third of subjects received another stimulant prescription after hospital discharge. Of these, 45% were readmitted with psychosis or mania shortly thereafter. We conclude that initiation of prescription stimulants is associated with an increased risk of hospitalization for psychosis or mania. Resumption of therapy is common, which may reflect a lack of awareness of the potential causative role of these drugs.