Quality of Life (QOL) is an outcome measure particularly useful to assess the effects of deinstitutionalization policies. To date no large-scale study has been conducted in residential facilities (RFs). Participants included 1492 subjects living in 174 RFs (20% of the total) randomly sampled in 15 Italian regions. Assessment instruments included the WHOQOL-Bref, the GAF, and the Physical Health Index (PHI). WHOQOL scores of residents were compared with those of healthy subjects (N = 65) and outpatients with schizophrenia (N = 162). Multivariate analyses were used to examine the relationship between selected patients' characteristics and WHOQOL scores. Mean WHOQOL scores of residents were similar to those of outpatients with schizophrenia, and substantially lower than those of healthy controls. Lower scores on WHOQOL domains were associated with schizophrenia and non-affective psychoses, unipolar depression, anxiety or somatoform disorders, shorter duration of illness, positive, negative or mood symptoms, lower GAF scores, no participation in internal activities, and PHI score. Our findings are consistent with previous studies. The present study highlights a marked difference between patients in RFs and healthy controls in the social domain. This suggests the need of well-designed rehabilitation plans, tailored to patients' needs, to foster the development of their independence and, ultimately, improve their QOL.