Researchers, caregivers, and policymakers alike have always assumed that continuity of care with aftercare services following a psychiatric inpatient discharge is an important factor in enhancing the stability and tenure of community living. However, the extent to which this relationship prevents homelessness has not been fully explored. This article looks at the effectiveness of outpatient services delivered to people within thirty days of discharge from psychiatric hospitalization. The sample consisted of homeless adults with mental illness, and the study assessed the reoccurrence of homelessness following hospital discharge. Prompt connection with aftercare services was effective in reducing homelessness for people who used the shelter system a single time in the year prior to their psychiatric hospitallization. For repeated users of the shelter system, the recurrence of homelessness was not correlated with timely outpatient services following hospital discharge. The study suggests that continuity of care is instrumental in prevent future homelessness among a portion of the homeless mentally ill population. For homeless mentally ill people with recent histories of repeated shelter use, greater diversity and intensity of outpatient services are necessary.