Employment and work can have a positive effect on mental health by pro
viding opportunities for skill development, social contact, self-estee
m, and income. Unemployment is a source of anxiety, stress, and depres
sion. At the same time work can be a major source of stress by decreas
ing opportunities for control and autonomy. This article examines the
role of work and unemployment and the relationship of work status to o
ther indicators of community adjustment among a sample of 68 psychiatr
ic clients in outpatient treatment. Comparisons are made between clien
ts who are not working or seeking work, those who are unemployed and s
eeking work, and those who are currently working. Regression analysis
is then used to examine the effect of work status on other indicators
of community adjustment: psychiatric symptoms, functioning, social int
egration, stress, and mental hospitalizations. Working clients are mor
e likely to be male and younger and to have had previous work experien
ce. Working is related to higher levels of functioning in the communit
y, while unemployment is positively related to stress. Work status was
not related to social integration, indicating that work may be an alt
ernative source of social support and should receive separate attentio
n in assessments of community adjustment and integration.