Few studies have specifically investigated the cognitive correlates of employment for persons with mental retardation. To evaluate the relationship of cognitive and adaptive functioning to work status, 56 competitively employed and 55 unemployed individuals with mental retardation underwent a comprehensive neuropsychological and adaptive behavioral evaluation. Results of multivariate analysis of covariance (MANCOVA) revealed significant group differences in cognitive and adaptive behavioral domains controlling for gender and severity of mental retardation. Follow-up ANCOVAs showed that the employed group performed significantly better than the unemployed group on measures of attention, memory, verbal comprehension, visual perception, and adaptive behavior. Using discriminant function analysis, 73.2 percent of the employed and 76.4 percent of the unemployed people were predicted correctly. These results suggest that adaptive behavior and specific aspects of cognitive functioning are significant predictors of successful employment for persons with mental retardation.