We sought to explore clinical factors associated with successful transition from Assertive Community Treatment to less intensive clinical services. Mixed-method observational follow up study of veterans discharged from three VA-affiliated ACT teams to less intensive clinical services. Of the 240 veterans in ACT, 9% (n = 21) were discharged during the study period. Among the 11 of 21 discharged veterans who enrolled in the follow up study, reason for discharge, designated by the veteran’s primary clinician at the time of discharge, predicted outcomes (p = 0.02) at 9 months, with “disengagement” as a reason for discharge predicting poorer outcomes. Six of 11 veterans experienced poor outcomes at 9 months, including incarceration and substance use relapse. ACT clinicians rarely discharge clients. Many clients may experience negative clinical events following ACT discharge, and clients may be difficult to follow post-discharge. Client disengagement from ACT may indicate higher likelihood of poor outcomes following discharge to less intensive clinical services.