The study randomly assigned male inmates with co-occurring serious mental illness and chemical abuse (MICA) disorders to either modified therapeutic community (MTC) or mental health (MH) treatment programs. On their release from prison, MICA inmates who completed the prison MTC program could enter the MTC aftercare program. The results, obtained from an intent-to-treat analysis of all study entries, showed that inmates randomized into the MTC group had significantly lower rates of reincarceration compared with those in the MH group. The results also show that differences between the MTC + aftercare and comparison group across a variety of crime outcomes (i.e. any criminal activity, and alcohol or drug related criminal activity) are consistent and significant, and persist after an examination of various threats to validity (e.g. initial motivation, duration of treatment, exposure to risk). This study provides some support for the effectiveness of the prison TC only condition. The findings are encouraging and consonant with other studies of integrated prison and aftercare TC programs for substance abusing non-MICA offenders, although qualified by the possibility that selection bias (i.e. differences in motivation on entry into aftercare) may be operating. Nevertheless, given the available evidence and the need for effective programming for MICA offenders, program and policy makers should strongly consider developing integrated prison and aftercare modified TC programs for MICA offenders. Copyright © 2004 John Wiley & Sons, Ltd.