BACKGROUND: The behavioral model of health service use identified health needs, service preferences (predispositions), and service availability (enabling factors) as important predictors, but research has not conceptualized consistently each type of influence nor identified their separate effects on use of substance abuse and mental health services or their value in predicting service outcomes. OBJECTIVES: To test hypotheses predicting use of substance abuse and mental health services and residential stability and evaluate peer specialists' impact. RESEARCH DESIGN: Randomized trial of peer support added to standard case management in VA-supported housing program (Housing and Urban Development-VA Supportive Housing program). SUBJECTS: One hundred sixty-six dually diagnosed Veterans in Housing and Urban Development-VA Supportive Housing program in 2 cities. MEASURES: Average VA service episodes for substance abuse and mental illness; residential instability; preferences for alcohol, drug, and psychological services; extent of alcohol, drug, and psychological problems; availability of a peer specialist. RESULTS: Self-assessed health needs, mediated by service preferences, and assignment to a peer specialist predicted use of VA behavioral health services and residential stability, as did chronic medical problems, sex, and race. CONCLUSIONS: The behavioral model identifies major predictors of health service use and residential stability, but must recognize the mediating role of service preferences, the differing effects of alcohol and drug use, the unique influences of social background, and the importance of clinical judgment in needs assessment. Service availability and residential stability can be increased by proactive efforts involving peer specialists even in a health care system that provides services without a financial barrier.