More than 24,000 teenagers took part in Mission Australia's latest survey, now in its sixteenth year.
But the organisation said much more needed to be done to destigmatise mental illness.
Their 2017 Youth Survey found that a third of young people thought mental health was a prominent issue for them, more than double who said that in 2015.
Coping with stress and depression, and struggles with school and body image, were among the toughest problems for teenagers, while alcohol, drugs, and discrimination were also identified as key issues.
The CEO of Mission Australia, James Toomey, said young people's concern about mental health had been a "rising trend" in Australia over the past few years.
He told SBS News: "There have been greater efforts to destigmatise mental health, and that might be reflected in some way in the survey responses, because it is now easier for people to talk about mental illness and also easier for people to recognise the signs and symptoms of mental illness.
"But I think more work around destigmatising mental illness and mental health generally could always be done and we could always make improvements in that area."
'Have conversations, stay close'
Mr Toomey believed family and friends were a significant resource for young people who were struggling with mental illness and that families should take the time to inform themselves about how best to help.
"Every year we see that family and friends are the go-to place for young people to talk about their concerns. Support for them is around helping families to understand that mental health is something that is around us and is destigmatised within a family setting as well, and also for families to be able to inform themselves about what the services and supports are that are available to them.
"Websites like have got some really good information, advice and guidance around what the signs and symptoms are of mental illness in young people, but also how to have conversations with young people, and to stay close to them and be able to guide them in the right way."
The report found that young people in regional areas felt more concerned than those in major cities that where you live could have a negative impact on your future plans.
While four in 10 teenagers said they were extremely confident or very confident about their future after school, more than half of young people revealed they saw academic ability, financial difficulty or mental health as a barrier to achieving their ambitions.
More girls than boys felt this way - for example, 26 per cent of young women said their academic ability was a problem, as opposed to 16 per cent of young men.
Coordinated policies and programs
Challenges for Aboriginal and Torres Strait Islanders mentioned in the report included higher level of encounters involving drugs, bullying and discrimination.
Drugs and alcohol were a concern for 41 per cent of this community, as opposed to 31.5 per cent for their peers.
But more development of coordinated policies, services and programs is key to equipping support staff to help teenagers, Mr Toomey said.
He criticised what he called the "cyclical" governmental approach to dealing with mental illness, and states a greater breadth of service provision as well as more coordination is necessary to really make a difference.
"We are always seeking longer-term commitments to a number of challenges that are identified in the new survey. What we tend to see is some cyclical responses which are short-term and not particularly well-coordinated," he said.
"What we're asking for is a greater breadth of service provision but also a greater coordination of service provision that enables people to access the services they need."
'There are people who love you'
The CEO of mental health organisation Reach Out, Jono Nicholas, said if you notice a change you can't explain in somebody, to ask them about it.
He encourages anyone who might be struggling to ask for help.
"For anyone who is going through a tough time, whether you are young or not so young, there are people who love you, there are people who care for you. Make sure that you talk to someone.
"[Access] services like ReachOut - all you need to do is jump on to 24 hours a day, seven days a week. It's online, anonymous, and you can access it right now. We also have a service for parents there as well. So for a parent who is really worried about a teenager, go to our parents' section. There's great help and advice for you to better help your teenager."
Anyone affected by this story can contact Lifeline on 13 11 14.
