The current study assessed the effectiveness of a prison-based substance abuse treatment therapeutic community (TC) providing treatment to male inmates dually diagnosed with both substance abuse and mental health disorders. The findings show a short-term impact of the program on arrest after release, with program participants significantly less likely than comparison group offenders to be arrested or returned to prison within three months of release. Logistic regression analyses confirmed that program participants are more likely than the comparison group to be medication compliant, abstinent from substances, and more stable at three months after release. The analyses suggest that participation in the program increases the likelihood of medication compliance after release. The mediational model resulting from this study suggests that treatment participation directly impacts medication compliance. Medication compliance impacts substance use, and these two factors then combine to improve mental health stability. For this population, mental health stability leads to positive outcomes in the community. Medication compliance not only improves mental health stability, but also leads to a reduction or elimination of mental illness symptoms that decreases the need to self-medicate with substances. For these men, medication compliance is the pivotal factor in reducing recidivism after release. These outcome evaluation results indicate that program participation has a significant positive impact on the lives of participants after release. The primary outcome findings suggest that programs treating dually diagnosed offenders should continue to emphasize the importance of medication compliance. Medication compliance should be stressed not only during residential TC services, but during the provision of aftercare and outreach services as well. The current findings demonstrate the effectiveness of the treatment model for dually diagnosed offenders. (Contains 8 tables and 1 figure.)