Over the past quarter century a shift has occurred from traditional institution-based models of care for persons with severe mental illness (SMI) to more individualized community-based treatments. Along with this, there has been a significant shift in thought about the potential for persons with SMI to be "rehabilitated" toward lifestyles that more closely approximate those of persons without such illness. A central issue is the ability of a person to hold a regular full-time job for a sustained period of time. There have been several attempts to develop novel and radical models for program interventions designed to assist persons with SMI to sustain full-time employment while living in the community. The most promising of these have emerged from the tradition of psychiatric rehabilitation with its emphases on individual consumer goal setting, skills training, job preparation and employment support (Cook, Jonikas and Solomon, 1992). These are relatively new and field evaluations are rare or have only recently been initiated (Cook and Razzano, 1992; Cook, 1992). Most of the early attempts to evaluate such programs have naturally focused almost exclusively on employment outcomes. However, theory suggests that sustained employment and living in the community may have important therapeutic benefits in addition to the obvious economic ones. To date, there have been no formal studies of the effects of psychiatric rehabilitation programs on key illness-related outcomes. To address this issue, this study seeks to examine the effects of a new program of supported employment on psychosocial outcomes for persons with SMI.