To understand better the implications of co-occurring mental and substance use disorders, we examined DSM-III-R diagnoses and life problems among a representative sample of 314 patients admitted to either a psychiatric hospital or a residential substance abuse treatment program from the same inner-city catchment area. Based upon the Structured Clinical Interview for DSM-III-R, the patients were divided into four groups. The first two groups had dual diagnoses, either: a) a primary axis I mental disorder (MD) and a comorbid psychoactive substance use disorder (PSUD); or b) a PSUD-related mental disorder and a PSUD, but no primary axis I MD. The third and fourth groups had a single diagnosis, either: c) a primary axis I MD, but no lifetime PSUD; or d) a PSUD, but no lifetime primary axis I MD. As expected, the two dual disorder groups had more cumulative problems than did either of the single disorder groups. Dually disordered patients with PSUD-related MD most resembled single-diagnosis PSUD patients in terms of substance use profile and life problems. Dually disordered patients with primary MD more resembled single-diagnosis MD patients, but had more severe life problems. Presence of a PSUD was associated with male gender, antisocial personality disorder, and more severe legal problems. Presence of a primary mental disorder was associated with more extensive prior hospitalizations and greater psychiatric severity.