The number of patients suffering from chronic mental disorders but living outside the psychiatric hospital is undergoing a steady increase, which is reflected in an increasing demand for appropriate vocational and occupational facilities. This demand is met primarily by outpatient work therapy, self-help enterprises and enterprises providing jobs to supplement pensions, and by special departments for the mentally retarded in workshops for the handicapped. Within the framework of a prospective study on vocational rehabilitation of the mentally ill, 502 rehabilitants forming a representative sample for the Westphalia-Lippe region of Germany were examined. This sample comprised 313 male and 189 female probands with an average age of 36, almost two-thirds of them suffering from schizophrenic disorders. Only 12.8% of those questioned are able to cover their living expenses primarily from their earnings. Half of them are living in sheltered accommodation, one quarter with their parents, and only one quarter on their own. Most are resigned to remaining in sheltered employment. Only 16.7% expect to change to the open labour market. The level of subjective job satisfaction is high in general. Together with other complementary facilities, sheltered employment permits chronically ill patients to live outside the psychiatric hospital and offers them positive social and psychological aspects of work. With few exceptions, it does not offer an opportunity to cover living expenses. Our follow-up investigations will provide information on the further course of vocational rehabilitation.