Fifty-three homeless mentally ill patients were studied by two psychiatrists in a treatment setting in which data could be gathered from family members and other third parties as well. All the patients were severely mentally ill when the homelessness immediately preceding the current admission began. For the study group, the disabling functional deficits of major mental illness appeared to be important contributing factors to homelessness. These deficits included disorganized thinking and actions, poor problem-solving skills, inability to mobilize oneself depression, and paranoia that prevented acceptance of help. Other important factors contributing to homelessness were the lack of a comprehensive and effective system of mental health care, substance abuse combined with severe mental illness, and the tendency for chronically and severely mentally ill persons, especially during their youth, to pursue their life goals in an unrealistic or irrational way.