Work has always been the goal of the vocational rehabilitation process, and has assumed major importance in the field of psychiatric rehabilitation. The significance accorded work is apparent in the appropriation of millions of federal dollars for improved vocational training technologies (Rehabilitation Acts Amendments, 1986: P.L. 99-506), as well as in the volume of vocationally-oriented literature in the field of psychiatric rehabilitation. Despite policy and program attention, competitive employment success for individuals who are mentally ill remains marginal, with most national and local reports citing employment rates as low as 5 percent and only as high as 25 percent. These poor outcomes are generally attributed to individual disabilities or environmental obstacles, but few studies have attempted to determine the meaning of work to this population by examining the impact that employment status has on overall quality of life. The present study explores the impact of work status for a sample of 81 individuals with chronic mental illness participating in community rehabilitation programs in Maryland. Individuals who met the study criteria were randomly selected form programs, and were assessed using the Quality of Life Interview (Lehman, 1988) and the Vocational Development Scale (Hershenson & Lavery, 1978). Quality of life theory and research suggests that specific domains of an individual's life have an impact on overall reports of well-being. Therefore, this study assesses the relationship between work status and life satisfaction as an analysis of main effects, and then analyzes selected variables that might mediate this relationship. Job satisfaction and vocational development are also analyzed. Results indicate that competitive employment per se does not have a direct effect on life satisfaction, but that gender and satisfaction with employment status mediate this relationship. Although quality of life research suggests that motivation might mediate the relationship between status and satisfaction, this did not appear to be the case for this sample, nor did there appear to be a relationship between work competence and job or life satisfaction. The study explores the implications of the results both for public policy and for program planning. Recommendations for further research are discussed.