This paper examines the psychological impact of receiving welfare. The prospective longitudinal data are from a cohort of African American mothers (N = 833). Four explanations structured the analyses: social selection; chronic burdens; a failure hypothesis; and earlier life conditions of welfare recipients. Psychological distress was assessed by women's reports of depressed and anxious moods. Women were categorized into one of four welfare conditions by receipt of welfare when their children were first-graders and 10 years later. Concurrent and longitudinal relationships existed between the women's welfare status and reports of psychological distress. Welfare recipients had more chronic burdens--including perceived ill health--which helped to explain these relationships. Measures of failure did not "explain'' the greater psychological distress. Women who grew up receiving welfare were more likely to report psychological distress and lower self-esteem later in life. The women's education influenced welfare and physical and psychological well-being.