The author examines three studies of the major monetary costs and benefits of psychosocial rehabilitation of the mentally ill; he focuses on hospitalization costs, costs of community treatment, and earnings from competitive employment. In the first study, which compared the effects of psychosocial rehabilitation with those of a support group over a nine-month period, an estimated savings of $1,880 per client was found among the clients receiving psychosocial rehabilitation. In the second study of treatment costs for 40 chronic psychiatric recidivists who were involved in an aggressive home outreach program, an estimated annual savings of $5,000 per client was found. In the third study 101 clients were interviewed six months after they had left a psycbosocial rehabilitation program. Their earnings from competitive employment were linearly related to their length of participation in the program. The author concludes that these studies offer substantial evidence for the economic advantages of psychosocial rehabilitation.