This exploratory qualitative study examined contexts and processes of social relationship development as experienced by adults with schizophrenia participating in assertive community treatment (ACT) programs. Semistructured interviews with 20 ACT clients diagnosed with schizophrenia-spectrum disorders and 2 ACT staff members were analyzed using grounded theory analysis methods. Results showed that aside from contacts with family members and providers, participants' interactions with fellow mental health clients tended to dominate social interactions, and that this pattern appeared to be influenced by both the concentration of social opportunities in daily activities of service utilization and the ACT program emphasis upon facilitating relationships between clients. Participants described their relationships with other mental health clients in primarily positive terms, yet several participants expressed dissatisfaction and desired greater integration into mainstream social networks. Implications for mental health service delivery are discussed.