ABSTRACTAltro Health and Rehabilitation Services is an agency well‐known for its successful work in rehabilitating the mentally ill. Altro offers psychiatric patients the experience of employment in a sheltered work setting plus the services of a social case worker to oversee their progress in the work setting and to assist them toward normal occupational pursuits in the community. This paper examines the Altro structure in an effort to account for the effectiveness of its psychiatric program.Drawing on Parsons' structural‐functional theory and Bales' related small group work and on the prevailing traditions in organizational sociology, we first chart a set of conditions under which successful rehabilitation can be expected to occur. The object of rehabilitation is change in the state of the personalities of the subjects. This requires the exertion of pressure for growth and the provision of support on the part of the agents who direct the process. Rehabilitation also demands the application of leadership by the agents of control. Leadership is the ability, based on an individual's personal characteristics, to elicit his followers' compliance in a broad range of matters. Leadership involves the exercise of influence, i. e, change of preferences on the followers' part. While the same leader may provide both pressure for growth and support, as in traditional psychotherapy, the effectiveness of a rehabilitation program, it is suggested, is enhanced if these incentives are allocated to different roles provided that the leaders support each other's efforts and re‐enforce each other's authority.We next consider the extent to which Altro meets these conditions. Altro divides leadership between work supervisors and social workers, with the former specializing in pressure for growth and the latter in support. Work supervisors and social workers are arranged in separate hierarchies of authority, and contact between them is limited to prevent the erosion of each group's autonomy by the other. At the same time, mechanisms are available for harmonizing the two sets of interests, with primacy granted to social work considerations. Congruence between the model and the Altro structure is not complete, however. The social worker's role involves a larger element of pressure for growth than the model calls for. This is symbolized by the social worker's position as arbiter of sanctions in the work setting. The mechanisms Altro uses to guard against the dysfunctions of too much pressure are described.Altro does not encompass all of the patients' treatment relations. We focus briefly on the matter of leadership coalition between Altro and the other treatment organizations and personnel that share the patient and describe the meam Altro employs to foster interagency cooperation.Like other socialization processes, the Altro rehabilitation program involves expansion of the patient's social memberships. In the final section, we raise the issue of the relationship between the pacing of this expansion and the patient's capacity to sustain plural memberships. We discuss some of the ways by which Altro tries to adapt this pacing to the patient's needs and explore some of the limitations imposed on these adaptations by interagency divi