Objectives. In November 2004, California voters passed the Mental Health Services Act, which allocated more than $3 billion for comprehensive community mental health programs. We examined whether these county-level programs, known as "full service partnerships," promoted independent living arrangements (i.e., recovery) among their clients. Methods. We used Markov chain models to identify probabilities of residential transitions among 8 living arrangements (n = 9208 adults followed up to 4 years). We modeled these transitions on the basis of patterns of program participation and clinical and sociodemographic characteristics. Results. Interrupted program participation and substance abuse were significantly associated with a reduced likelihood of independent living and a greater probability of homelessness and incarceration. Persons with schizophrenia were the least likely to live independently, followed by persons with bipolar disorder. Compared with Whites, non-Whites were more frequently found to be homeless or in jail. Conclusions. Clients with sustained enrollment in California's comprehensive community mental health programs appear most likely to transition to independent living. The likelihood of this transition, however, shows a disparity in that ethnic minority clients appear least likely to transition to independent living.