OBJECTIVE We examined factors associated with telehealth utilization during COVID-19 among adult Medicaid beneficiaries with behavioral health conditions. METHODS NC Medicaid 2019-2021 beneficiary and claims data. METHODS This retrospective cohort study examined and compared behavioral health service use pre-COVID-19 (03/01/2019 to 02/28/2020) and during COVID-19 (04/01/2020 to 03/31/2021). Telehealth users included those with at least one behavioral health visit via telehealth during COVID-19. Descriptive statistics were calculated for overall sample and by telehealth status. Multilevel modified Poisson generalized estimating equation examined associations between telehealth use and patient- and area-level characteristics. METHODS We identified individuals ages ≥ 21-64, diagnosed with a behavioral health condition, and had at least one behavioral-health specific visit before COVID-19. RESULTS Almost two-thirds of the cohort received behavioral health services during COVID-19, with half of these beneficiaries using telehealth. Non-telehealth users had steeper declines in service use from pre- to during COVID-19 compared to telehealth users. Beneficiaries identifying as Black, multiracial or other were significantly less likely to use telehealth (ARR = 0.86; 95% CI: (0.83, 0.89)); (ARR = 0.92; 95% CI: (0.87, 0.96)) compared to White beneficiaries. Those eligible for Medicaid through the blind/disabled programs and who qualified for a state-specific specialized behavioral health plan were more likely to use telehealth (17% and 20%, respectively). CONCLUSIONS During the pandemic, telehealth facilitated continuity of care for beneficiaries with behavioral health conditions. Future research should aim to investigate how to reduce the digital divide and ensure equitable access to telehealth.