The effect of a treatment program (E) providing inpatient care, a day hospital, community housing, and sheltered work are compared with a program (C) emphasizing rapid discharge. A group of 94 male general psychiatric patients were randomized to the two units. Outcome data collected at 18 months from admission revealed small but significant differences between the total samples in employment, maintenance of treatment contact, use of medication, and social adjustment. More C than E patients were in the hospital after the 14th month. Program effects varied considerably with patient type. Patients with less social disability had somewhat better employment outcomes with the E program, but no differences in use of services. Patients with a better prognosis by measure of psychopathology (Minnesota Multiphasic Personality Inventory cluster and diagnosis of schizophrenia) spent less inpatient time in the E program, but were not helped to better employment outcomes. Patients with greater social handicap were not differentially affected. More E patients than C with a poorer prognosis stayed in outpatient treatment and used antipsychotic medications. Patients in the E group with better previous employment and more social isolation used the E day hospital and community housing more heavily than other E subgroups.