Improving the quality of life of individuals with severe mental illness has been the focus of considerable research. With advances in treatments for severe mental illness, particularly in psychiatric rehabilitation, evaluating outcomes has become increasingly important. Given the complex and multidimensional nature of severe mental illness, outcome evaluation of psychiatric rehabilitation is particularly difficult. This article addresses issues in evaluating psychiatric rehabilitation outcomes, including key outcome domains, selection of methods and measures, and meaningful use of results. Continuing conceptual and methodological issues are discussed. Also, future directions are explored, including evaluating multidimensional treatment effects and interactions and building an integrated understanding of all of the outcomes involved in psychiatric rehabilitation. 1 The term psychiatric rehabilitation may be confused with psychosocial rehabilitation, and the two are sometimes used interchangeably. In practice, both are sometimes used as a contraction of biopsychosocial rehabilitation. However, psychosocial rehabilitation sometimes specifically refers to a particular type of program, associated with specific prototypes, such as Fountain House in New York and Thresholds in Chicago (McEvoy, Scheifler, & Frances, 1999).