A rehabilitation living unit founded on the halfway house and therapeutic community models was established in a university residence hall to provide a resource for emotionally disturbed students who might otherwise require hospitalization or have to leave school. An initial baseline study indicated that a large number of scholastically able students drop out of school each year because of emotional problems. Over a period of seven semesters 52 male and female clients were treated in a living unit on two corridors of a large university dormitory. Approximately the same number of volunteer students lived in the unit and a group of students who were nominated but did not participate served as clinical controls. Results indicated that severely emotionally disturbed students can be provided satisfactory care in a rehabilitation living unit in a regular university dormitory without remarkable stigma or high risk to themselves or others. Outcome measures for clients showed a decreased drop-out rate, symptomatic improvement, and more favorable presentation of self to others as well as indications of increased personal comfort. (Author)