This study assesses the extent of residential segregation among 15,246 people diagnosed with psychiatric disabilities and receiving Medicaid (MA) in Philadelphia, and an identically sized group of MA recipients serving as matched controls. Results indicate that overall levels of residential segregation among this group were modest at their most extreme, were not markedly different from a control group of Medicaid recipients without any record of treatment for severe mental illness, and were substantially reduced after taking poverty into account. There were, however, localized areas in Philadelphia that showed distinct concentrations of persons with psychiatric disability, suggesting there may be a subgroup that is more at-risk for living in areas with elevated concentrations of persons with serious psychiatric disability. (Contains 3 tables and 6 figures.)