We assessed the effect of poverty on psychiatric status using two waves of New Haven (Conn) Epidemiologic Catchment Area data. Poverty was defined using federal poverty guidelines; psychiatric status was assessed by the Diagnostic Interview Schedule (DIS). When examining the course of healthy respondents at the first interview, respondents in poverty had a twofold-increased risk (controlling for demographic factors) for an episode of at least one DIS/DSM-III Axis I psychiatric disorder. Rates of most specific psychiatric disorders were comparably higher for respondents meeting poverty criteria compared with those not in poverty, although these differences were not always statistically significant. The effects of poverty did not differ by sex, age, race, or history of psychiatric episodes.