A longstanding tradition of employment-related research has shown the mental health advantages of employment. However, given welfare reform mandates for employment and a welfare population with disproportionately high rates of depression and co-occurring substance abuse problems, it is unclear if women on welfare reap this advantage. This analysis draws on 4 years of data from the Welfare Client Longitudinal Study to examine the mental health benefits of employment among women on welfare (N = 419) and to assess whether drinking problems alter the relationship. Repeated measures analyses suggest that women who enter welfare with a drinking problem may not experience the same decline in depression symptoms following employment. Improving the connections between welfare and treatment services for women with alcohol problems may, however, have important implications for their mental health.