While the causes of the international youth crime decline have been disputed, it has been proposed that changing policing responses may have contributed. This study examines whether increased rates of police-led diversion have contributed to the youth crime decline in Australia. Fixed effects panel regressions were undertaken to examine the association between police diversion rates and youth offending prevalence and reoffending across regions in New South Wales and Victoria from 2005 to 2019. A significant decline in youth offending prevalence in this period was found but also a decline in police diversion rates for young people, and there was a lack of association between diversion rates and youth offending prevalence. In contrast, youth reoffending increased during this period. Notably, regions with higher diversion rates had significantly lower levels of youth reoffending. Findings suggest that police-led diversion is unlikely to have played a primary role in the Australian youth crime decline but may have reduced growth in reoffending in regions where it was used more frequently. Findings also indicate that youth offending declines have been socioeconomically conditioned. Implications for the causes of the youth crime decline and policing responses to young people are discussed.