Abuse of alcohol and other drugs is a frequent diagnosis among people with severe mental disorders (SMD), particularly among those who are homeless. A significant proportion, typically 50 percent or more, of people with SMD abuse alcohol or other non- prescribed psychoactive substances. Their substance abuse is strongly associated with clinical disability, homelessness, institutionalization, and treatment difficulty. To address this problem, the Connecticut Department of Mental Health has established an ACT team to provide integrated treatment for substance abuse and SMD to homeless, dually-diagnosed clients in Connecticut's largest and poorest city, Bridgeport. The proposed project will be a collaboration among the Connecticut Department of Mental Health, the Dartmouth Medical School, and the Greater Bridgeport Community Mental Health Center to: (1) Monitor the integrated treatment of substance abuse and SMD in both ACT teams and in standard case management services as set forth in the treatment manual developed during Phase 1 of this project. (2) Conduct a rigorous evaluation of the relative effectiveness and costs of the ACT program design for homeless, dually diagnosed clients in an urban area where cocaine and other drugs are readily available and widely used. The research will carefully document the interventions provided to clients in the ACT and standard case management conditions to document both what interventions actually occurred and the costs of the interventions so that any differences in clinical outcomes and costs can be attributed to differences identified in the processes of care. (3) Determine the effectiveness of community reinforcement treatment for dually diagnosed clients. Half of the consenting study participants in both the ACT and standard case management condition who reach the active treatment phase will be randomly assigned to a contingency management intervention which will reward abstinence based on the community reinforcement approach. (4) Determine how families contribute to client outcomes and how ACT teams influence family support. The project will capitalize upon an ongoing randomized clinical trial (ACT versus standard case management, N = 150). Hence the project offers a powerful comparison of the effectiveness of ACT among homeless, dually-diagnosed clients in a distressed urban area.