This study examines individual client- and community-level sources of variation in service use among clients entering 18 community treatment programs for homeless mentally ill persons as part of a national demonstration project. Assessment data on 1,828 clients were used to evaluate the relationship of a) individual client characteristics and b) site of entry, to both the intensity and diversity of service use. Hierarchical multiple regression was used to identify the relative importance of client characteristics and site of entry. Client characteristics explained only 2% to 3% of the variance in service use. Inter-site variation accounted for 2 to 3 times as much of the variance. Inter-site differences account for substantially more of the variance in service use among homeless persons with mental illness than individual client characteristics. Further studies are needed to identify specific community-level factors that account for these variations.