This study examined the patient case mix and program determinants of 6-month readmission rates and early treatment dropout for 7,711 VA inpatients with both substance abuse and major psychiatric disorders treated in one of 104 substance abuse programs. Patients were treated in one of three types of inpatient programs: explicitly designed dual diagnosis specialty programs, substance abuse programs with a dual diagnosis psychotherapy group or standard substance abuse programs. Dual diagnosis specialty programs differed from regular substance abuse programs in that they had a more severe case mix, a higher 180-day readmission rate, greater dual diagnosis treatment orientation, used more psychotropic medication, had longer lengths of stay, had greater tolerance of relapse and medication noncompliance, and a higher rate of psychiatric aftercare in the 30 days after discharged. Programs with less severe case mix, longer intended and actual length of stay, lower 7-day dropout rates, greater tolerance of problem behavior, 12-step groups, and higher immediate postdischarge utilization of outpatient mental health treatment lower 180-day readmission rates. Programs with less severe patient case mix, more use of psychotropic medications but less of methadone and antabuse, less varied and diverse treatment activities, and low use of patient-led groups had lower dropout rates.