Background. Knowledge of the level of psychosocial impairment associated with psychosis is important in evaluating the impact of the illness on those affected. When such knowledge is derived from community-based epidemiological surveys, it can help in providing a public health perspective for service planning with information derived from representative samples of patients.Methods. A two-phase epidemiological survey of persons with psychosis in four predominantly urban areas of Australia. First phase screening for psychosis (N = 5710) was followed by a semi-structured interview of a stratified random sample (A = 980) to assess psychopathology (lifetime and current) and psychosocial disability.Results. Most of the interviewees were unemployed and had never married. There was widespread impairment in sexual and social relationships and in the performance of activities of daily living. Over half expressed dissatisfaction with life in general. Persons with affective psychoses were often as disabled as those with schizophrenia and diagnostic categorizations were not important in the conferment of risk for disability. Rather, poor pre-morbid work or social adjustment and poor course of illness were potent risk factors for diverse forms of disability in persons with psychosis.Conclusion. A large proportion of persons with experience of psychosis living in the community suffers from significant levels of psychosocial disability. Disablement seems to reflect, in part, a diathesis of poor pre-morbid functioning and less than optimal response to treatment of the disorder.