Objective: The authors describe two psychosocially oriented community residential facilities for patients with persistent and severe mental disorders and multiple failures at community tenure, and they report a retrospective study designed to evaluate treatment outcomes of program residents. Methods: The study employed a retrospective single-group repeated-measures design to evaluate 104 patients who completed the one-year follow-up. One-year mean number of admissions to and days in a bospital or crisis center during the two years before program entry were compared with mean admissions and days for the follow-up year; employment status, living status, and Global Assessment of Functioning (GAF) Scale scores at program entry and at one-year follow-up were also compared. Thirteen sociodemographic and clinical variables were individually tested for association with outcome. Results: Hospital and crisis center admissions and days were significantly reduced during the follow-up year. At one-year follow-up, a significantly greater proportion of patients were employed and living independently, and fewer were homeless. GAF scores were significantly higher. No significant correlations between outcome and socio-demographic and clinical variables were found. Conclusions: Despite design limitations of the study, the findings suggest that psychosocial residential treatment models can offer cost-effective and clinically efficacious care to persistently mentally ill patients.