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OBJECTIVES: Continuity of care is considered to be essential to the effective treatment of persons with severe mental illness, yet evidence to support the association between continuity and outcomes is sparse because of a lack of longitudinal studies and of comprehensive continuity measures. The purpose of this study was to examine the relationship between continuity of care and outcomes. METHODS: A new multilevel measure of service continuity, the Alberta Continuity of Services Scale for Mental Health (ACSS-MH), was used in a 17-month follow-up study of 486 adults with severe mental illness in three health regions of Alberta, Canada. RESULTS: Endpoint information was obtained for 411 participants (85 percent). The mean continuity score reported by patients was 131±20 out of a possible 185. The mean continuity score as rated by observers was 39±10 out of a possible 59. Higher levels of observer-rated continuity were associated with older age, lower annual household income, a diagnosis of psychotic disorder, and no suicidality or alcohol use. Continuity was also significantly associated with a better quality of life at endpoint (generic and disease specific), better community functioning, lower severity of symptoms, and greater service satisfaction. The associations between continuity and quality of life held after adjustment for empirically identified confounders. CONCLUSIONS: Positive relationships between continuity of care and health outcomes among persons with severe mental illness suggest that efforts at improving continuity in and among mental health services are worthwhile.