A proportion of persistently homeless men with psychosis are unable to function in the community, despite intensive outreach. The present study aimed to (i) develop a method to measure the number of homeless clients with a psychosis who are unable to maintain basic levels of function, despite the application of intensive community treatment; and (ii) determine if the proportion of these men had increased in an Australian inner urban setting over a 5-year period. Criteria were developed and validated to define this group. A review of records of clients engaged in homeless settings was conducted in order to compare the proportion of men with these features in 2000 and 2005. In 2005, 23% met the criterion of long-term homelessness with poor function, despite intensive outreach, as compared with 17% in 2000 (P = 0.62). The 2005 cohort was more likely to have attempted intensive community psychiatric treatment (P = 0.04). We conclude that a proportion of homeless men with a psychosis in Australia do not achieve basic function, despite access to intensive outreach. The proportion of these men did not change between 2000 and 2005. These men require additional specialized services, including access to long-term supported housing.