OBJECTIVE: This study sought to evaluate the effects of a residential rehabilitation program for homeless mentally ill veterans on several measures of subjects' community adjustment. METHODS: Subjects' housing status, financial and vocational status, psychological stability, utilization of coping resources, and extent of social contacts were measured at entry into the program and at follow-up six months after discharge. Data were available for 58 subjects at follow-up. Outcomes for subjects who successfully completed the program were compared with outcomes for those who did not. RESULTS: As a group, subjects assessed at follow-up showed significant improvement in housing, financial, and vocational status, in severity of several symptoms of psychological and emotional distress, in utilization of some types of coping resources, and in measures of social contacts and satisfaction. However, subjects who completed the program were more likely to have improved their housing, financial, and vocational situations. CONCLUSIONS: Comprehensive residential rehabilitation programs can help homeless veterans improve several aspects of their lives and maintain stability in those areas after discharge.