This study investigated the importance of competitive work as compared to participating in community-based activities and having no regular daily activity for people with long-term mental illness. One hundred and three persons visiting an outpatient unit and representing the three targeted occupational conditions were randomized to the study and assessed on satisfaction with daily occupations, health, and wellbeing. Persons with work were more satisfied with their daily occupations and were interviewer-rated as better functioning than the other groups, but the groups did not differ on self-ratings of health and wellbeing. Unexpectedly, people participating in community-based activities did not show better satisfaction or functioning than those without regular daily activity. It was concluded that competitive work should be an urgent end goal for services designed for occupational or vocational support.