Persons with severe mental illness have high rates of comorbid substance use disorders. These co-occurring disorders present a significant challenge to community mental health services, and few clinical trials are available to guide the development of effective services for this population. The study aimed to evaluate the effectiveness of a program for case managers that trained them to manage substance use disorders among persons with severe mental illness.A cluster-randomized controlled trial design was used in South London to allocate case managers either to training or to a waiting list control condition. Outcomes and service costs (health care and criminal justice) over 18 months of 127 patients treated by 40 case managers who received training were compared with those of 105 patients treated by 39 case managers in the control condition.Brief Psychiatric Rating Scale scores for the intervention group indicated significant improvements in psychotic and general psychopathology symptoms. Participants in the intervention group also reported fewer needs for care at follow-up. No significant differences were found between the two groups in levels of substance use at 18 months. At follow-up both groups reported increased satisfaction with care. Service costs were also similar for the two groups.Compared with standard care, integrated treatment for co-occurring disorders provided by nonspecialist mental health staff produced significant improvements in symptoms and level of met needs, but not in substance use or quality of life, at no additional cost.