Adult patients placed into foster families by six administrations in three provinces of Canada were oberved at time of placement and followed up 18 months later. Over this period, they exhibited a substantial decline in symptoms-almost as great as with similar patients retained in the hospital. However, there was virtually no improvement in social functioning, despite the fact that the use of foster homes has been advocated mainly for the resocialization that was expected to occur there. In discussing the reasons for this paradoxical finding, recommendations are offered regarding the use of foster homes by mental health administrations.