OBJECTIVE This study examined the relationship of the Allen Cognitive Level Test (ACL) to demographics, diagnosis, and disposition after hospitalization among persons with psychiatric disorders. METHODS Data were retrospectively collected from medical records, including initial occupational therapy evaluation notes, on 62 female and 38 male patients consecutively admitted to an urban, acute psychiatric inpatient unit. Collected was information on demographics, diagnosis, mental and physical health history, initial ACL scores, role involvement, and discharge living situation (DLS). RESULTS Patients with higher initial ACL scores were more likely to be younger, to have lived independently before admission, to have been given nonpsychotic diagnoses, and to have been suicidal before admission. Although DLS was most strongly correlated with living situation before admission, ACL scores showed the second strongest correlation to DLS. Patients with higher ACL scores were significantly more likely to be discharged to independent living than were patients with lower ACL scores. CONCLUSIONS These results provide evidence that patients' cognitive level, as measured by the ACL, may be a useful predictor of community functioning. However, further research is needed to validate the Cognitive Disabilities Model.