Standard clinical significance classifications are based on movement between the "dysfunctional" and "functional" distributions; however, this dichotomy ignores heterogeneity within the "dysfunctional" population. Based on the methodology described by Tingey, Lambert, Burlingame, and Hansen (1996), the present study sought to present a 3-distribution clinical significance model for the 21-item version of the Depression Anxiety Stress Scales (DASS-21; P. F. Lovibond & Lovibond, 1995) using data from a normative sample (n = 2,914), an outpatient sample (n = 1,000), and an inpatient sample (n = 3,964). DASS-21 scores were collected at pre- and post-treatment for both clinical samples, and patients were classified into 1 of 5 categories based on whether they had made a reliable change and whether they had moved into a different functional range. Evidence supported the validity of the 3-distribution model for the DASS-21, since inpatients who were classified as making a clinically significant change showed lower symptom severity, higher perceived quality of life, and higher clinician-rated functioning than those who did not make a clinically significant change. Importantly, results suggest that the new category of recovering is an intermediate point between recovered and making no clinically significant change. Inpatients and outpatients have different treatment goals and therefore use of the concept of clinical significance needs to acknowledge differences in what constitutes a meaningful change.