Previous studies of residential and outpatient drug treatment programs have found that retention is higher in residential than in outpatient programs. This study attempts to verify previous findings by conducting an experiment that controls for ecological, self-selection, and program content biases. The Houston Recovery Campus is a research-focused, multiple-provider drug treatment facility for the indigent of Harris County, Texas. During the study period, 646 applicants were randomly assigned to two comparable 28-day programs. The first program was a residential program; the second was an outpatient day treatment program. Twenty-eight day retention rates were significantly higher for the residential program (76%) compared to the day treatment program (64%).