Large numbers of indigent cocaine abusers now present in center-city hospitals. Since many are also diagnosed for severe mental illness, options for their effective treatment are needed. The authors investigated the feasibility of treating these dually diagnosed patients along with the majority of abusers who were not severely impaired in a program that combines peerled treatment with psychiatric management and pharmacotherapy. Although group confrontation techniques were used, schizophrenics (N= 71) and patients with major depressive disorder (N= 50) experienced an outcome as good or better than the less impaired (N= 177) on retention, visit rates, and urinalysis results.