Archival data from 25,480 adults entering the Compensated Work Therapy (CWT) program of the Veterans Health Administration were analyzed to identify differences in work functioning and vocational rehabilitation among participants with psychiatric disorders alone, substance use disorders (SUD) alone, and psychiatric disorders with coexisting SUD. The co-existence of psychiatric disorders and SUD was associated with better work functioning, more participation in vocational rehabilitation, and a better outcome, compared to psychiatric disorders alone. Poorer functioning was seen on all variables relative to participants with SUD alone. These findings are due in part to correlates of substance abuse, but they may suggest that clinicians should focus on work and vocational goals to support other clinical efforts for clients with dual diagnoses.