There have been few recent studies reporting on the outcomes for users of psychiatric rehabilitation services. This group has complex, longer-term mental health problems. We aimed to investigate 5-year outcomes for this group and identify factors associated with outcome. Clinical outcome data on 141 users of a mental health rehabilitation service in inner London, UK, surveyed in 2005, were collected retrospectively 5 years later. Positive outcome was defined for those who were inpatients in 2005 as achieving and sustaining community discharge, and for those who were community patients, as progressing to and sustaining a less supported community placement. Negative outcome was defined as remaining in the same placement, moving to more supported placement or having a psychiatric admission. Over 5 years, 17 (12 %) people died, 50 (40 %) had a positive outcome, 33 (27 %) remained in a placement with a similar level of support and 41 (38 %) moved to a more supported placement and/or had a psychiatric admission. Thirteen (10 %) people moved to independent accommodation and sustained their tenancy successfully. Those with a record of non-adherence with medication during the 5 years were more likely to have a negative outcome (OR 8.60, 95 % CI 3.41 to 21.70). Adherence to medication is an important factor in facilitating successful community discharge for people with complex mental health problems who require psychiatric rehabilitation.