Recent studies have reported a high prevalence of mental illness among the homeless. As part of a community-based survey of 529 homeless adults, we developed and tested a model to increase our understanding of the factors related to their psychological distress. Using a previously validated and reliable scale of perceived psychological distress, we found that homeless adults were more likely to report psychological distress than the general population (80% vs. 49%). Distress levels were not associated with most demographic or homeless characteristics or general appearance. However, distress was related to unemployment, greater cigarette and alcohol use, worse physical health, fewer social supports, and perceived barriers to obtaining needed medical care. Since mental, physical, and social health are strongly related among homeless adults, alleviating distress among them may be most effectively done by implementing a broad-based health services package coupled with employment programs provided in an accessible service delivery setting.