The question has been raised whether it is useful or meaningful to dichotomize the homeless population by mental illness - i.e., to consider the mentally ill homeless as distinct from other homeless people. The current article presents evidence from a single data set to address this question empirically. Data from a randomly sampled population of 900 homeless men and women systemically interviewed using the Diagnostic Interview Schedule were examined to determine associations of mental illness with the problems of homelessness, controlling for the presence of substance abuse in the analyses. Although a few clinically meaningful associations with mental illness were found that might suggest directions for appropriate interventions, mental illness did not differentiate individuals in many important demographic and biographic respects. Individual diagnoses did not perform much better in differentiating the homeless by mental illness. Schizophrenia and bipolar mania showed a few significant associations not identified by the "major mental illness" construct. Major depression, constituting the majority of nonsubstance Axis I disorder in the homeless, provided no association beyond that obtained with the "major mental illness" category. The data provide little support for conceptualizing homeless subgroups or homelessness in general on the basis of mental illness alone. To do so also risks neglecting the emotional distress of the majority without major mental illness and the other problems that homeless persons share regardless of psychiatric illness. While serious mental illness is overrepresented among the homeless, it represents just one of many important vulnerability factors for homelessness. Substance abuse is far more prevalent than other Axis I disorders. Media images equating homelessness with major mental illness unnecessarily stigmatize homeless people and encourage oversimplified and narrowly conceived psychiatric interventions. While continuing attention is needed on improving identification and management of serious mental illness among the homeless, this must be accomplished within the broader context of social and economic aspects of homelessness.