OBJECTIVE: This study assessed the relationship between homelessness and specific quality-of-life problems for persons with severe and persistent mental illness. METHODS: The objective and subjective quality of life of 106 homeless persons with severe mental illness who lived on the streets or in shelters in Baltimore was compared with that of 146 domiciled persons with severe mental illness who lived in the community. RESULTS: Objective and subjective quality of life of the homeless subjects was clearly worse than that of the domiciled group in the areas of living situation, family and social relations, employment, daily activities, and legal and safety problems. Homeless subjects were also less likely to have federal disability entitlements. CONCLUSIONS: Poorer quality of life is associated with homelessness among persons with severe mental illness. Their quality of life may be improved by efforts to increase their access to disability entitlements and treatment services and to help them develop supportive social networks.