Abstract: Youth homelessness has become a global issue, with current figures estimated at 30 million young people worldwide, and projected to increase to 600 million by 2050. Typically, architects tackle this issue by either providing temporary shelter or building permanent housing. As such, more than just accommodation is needed. This paper uses Australia as the starting point for identifying the principles of transitional space design by redefining how a shelter functions, and by considering how humanizing spatial design characteristics could create a more holistic solution. The “collecting–- translating–- variance” framework was employed to collect quantitative and qualitative data and gain a deeper understanding of the current response to the youth homelessness crisis, as well as the experiences, journeys, and needs of homeless youths. The research revealed that the key to dealing with the homelessness crisis is in providing a comprehensive service structure—which, combines living spaces, rehabilitation spaces, education spaces, and sharing spaces. Aligned with the proposed principles, a transitional space would be a place where homeless youths are provided with quality permanent housing and where they can acquire practical occupational skills. This would enable young homeless people to reintegrate into society more quickly, and make a positive impression on the public. More broadly, by comparing the culture and policy in Australia with that of China, this study investigates whether these design principles can be used as a prototype in other countries and respond to each specific context.