Abstract-This observational study investigated the outcomes of a community-based rehabilitation program that was designed to enhance social functioning, social inclusion, and well-being of people with mental illness who were considered treatment failures by psychiatric professionals in Italy. Of the 144 patients who entered the program, 131 started the program and 109 completed either 12 or 18 months of treatment. Illness severity was assessed by the Health of the Nation Outcome Scales (HoNOS) and social functioning by the Social and Occupational Functioning Assessment Scale (SOFAS). On the HoNOS, 33% of patients showed reliable change. On the SOFAS, 27% showed reliable change, although the change was substantial for few patients. Over time, patients showed moderate but significant improvements on the HoNOS and SOFAS. The HoNOS subscales concerning interpersonal relationships and social inclusion showed significant change. Very isolated people with mental illness gained some advantages from this rehabilitation program that was based on a close relationship with a key worker; however, the program duration may have been inadequate to produce substantial changes. Our findings warrant further research based on controlled studies.