This study explores the treatment needs of homeless individuals participating in a large urban day shelter program. Alcohol and drug use, psychological distress, and stage of change were assessed in 100 participants presenting for services. The associations among substance use, risk perception, and readiness to change were examined for alcohol and drugs separately. Participants had high levels of psychological distress compared to "non-patient" samples. Eighty percent had used alcohol in the past 6 months, with 65% of those drinking at higher-risk levels; 60% had used drugs, with 82% in the higher-risk levels. While the majority felt that they drank and/or used drugs "too much", most were in precontemplation or contemplation stages of change. Intervention efforts for this population should focus on motivation, facilitation through the stages, and the associations between psychiatric symptoms and substance use.