The community of Wadeye in Northern Australia has been characterised in the popular media as being a hotbed of youth crime and as being ravaged by local youth gangs. This paper will describe an ethnographic project which was developed to explore the experiences of young people in the community and the dynamics of gang membership. Our participant observation and interviews were triangulated with a household survey which explored some key social determinants of health and wellbeing, as well as interviews with incarcerated community members about their experiences of gang involvement and their ideas about possible diversion activities for young people. Our research has demonstrated that gang membership plays an important role in identity formation, provides a sense of social cohesion and provides opportunities for transmission of important cultural and historical information. As such, they appear to be protective for both youth harm and youth suicide. This is important given the high number of potentially stressful factors in the community, as revealed through our survey; particularly the affects of very overcrowded housing on young peoples’ feelings of well being and thoughts of self harm.