Objective: Cognitive remediation programs often have larger effects on cognition compared with everyday outcomes. We compared changes across cognitive, functional competence, and vocational domains in 2 cognitive remediation programs. Method: A sequential enrollment, nonrandom design with 50 individuals with serious mental illnesses (psychotic and mood disorders) from a community vocational rehabilitation program. Action-Based Cognitive Remediation (ABCR), a new program that combines traditional cognitive training techniques with simulated workplace situations and goal setting for engaging with cognitively demanding activities (N = 24; 19 completers) was compared with traditional cognitive remediation (tCR; N = 26; 15 completers). Both groups met twice-weekly for 2-hr sessions over 10 weeks. Repeated measures analysis of variance was used to examine effects pre-and posttreatment and 10 weeks after treatment. Univariate analysis of variance and chi-square tests were used to compare work outcomes 6 months after intervention. Results: Significantly more ABCR participants (83%) were retained in the intervention compared with tCR (57%) and reported greater increases in perceived competence with cognitively challenging tasks (eta(2) =.23). ABCR effects were significantly larger than tCR on functional competence (eta(2) =.53), with smaller, nonsignificant differences in social cognition (eta(2) =.14) and neurocognition (eta(2) =.16). ABCR participants were marginally more likely to be competitively employed (68.4% vs. 40%) and, among those employed, ABCR participants experienced less job-related stress (eta(2) =.37). Conclusions and Implications for Practice: Cognitive rehabilitative programs for serious mental illness that rely on computer -based training for neuroplasticity should ensure opportunities for active skill development and therapist supported techniques to overcome challenges with generalizing cognitive effects to everyday outcomes.