PRIMARY OBJECTIVE: To determine (i) the effectiveness of a goal-directed, environment-focused occupational therapy intervention and (ii) to compare rehabilitation gains across a day hospital (outpatient) setting and home setting. RESEARCH DESIGN: Repeated measures cross-over design with pre-post test measures and a baseline control period, random allocation to a treatment setting sequence and an independent outcome assessor who was blinded to treatment sequence. METHODS AND PROCEDURES: Descriptive and non-parametric comparative analyses employed. Fourteen participants with severe traumatic brain injury completed a 12 week outpatient occupational therapy programme. The programme was directed by the participant's chosen goals, which were established using a client-centred, structured, goal-planning process. Outcome measures included Goal attainment scaling, the Canadian Occupational Performance Measure, the Sydney Psychosocial Reintegration Scale, the Mayo-Portland Adaptability Index, the Craig Hospital Inventory of Environmental Factors and self-rated satisfaction with therapy. MAIN OUTCOMES AND RESULTS: The therapy programme resulted in significant improvements in goal attainment, occupational performance, psychosocial reintegration and ability and adjustment levels, compared with baseline. Differences in gains made in home vs day hospital settings were not statistically significant, with the exception of higher levels of patient satisfaction with therapy at home. CONCLUSIONS: To assist further with decision-making about where to conduct therapy, further research is needed to compare the outcomes and determine the cost effectiveness of therapy at home and in day hospital settings.