ABSTRACT Results from a community survey in a sample of high-unemployment census tracts in southeastern Michigan showed significant elevations of depression, anxiety, somatization, and self-reported physical illness among the currently unemployed. These adverse effects were largely reversed by reemployment. Subsequent analyses documented modifying effects of social support, self-concept, and coping. We also found two mediating processes that account for the overall effects of current unemployment: (a) the intervening effects of financial strain, and (b) an influence of unemployment in creating heightened vulnerability to other stressful life events. The implications of these results for the design and implementation of preventive interventions are briefly discussed.