When welfare reform was implemented, Congress included the Family Violence Option that permits States to grant domestic violence exemptions regarding welfare-to-work provisions under the Temporary Assistance for Needy Families (TANF). At least 38 States have enacted such exemptions. The prevalence of domestic violence, mental health problems, and alcohol and other drug problems among welfare recipients have impacted welfare reform efforts. The current study surveyed representative samples of TANF recipients in two California counties beginning in the summer of 1999 and continuing at intervals of 1 year and 15 months. A comprehensive definition of domestic violence was adopted which incorporated the Conflict Tactics Scale. Definitions of mental health and alcohol and other drug problems were defined using the World Health Organization’s CIDI instrument. The four main findings indicate high rates of domestic violence among the welfare reform population. In approximately 15 percent of the cases, severe abuse was reported; over the 3-year study period, a total of 37 percent of the women reported serious domestic violence. Serious mental health problems and/or alcohol or other drug problem co-occurred with domestic violence in a large proportion of the welfare reform population. Domestic violence impairs a woman’s capacity to find employment; at the end of 1 year, 28 percent of women were working at least 26 hours a week if they did not experience domestic violence, while only 12 percent of the women who experienced domestic violence worked. Finally, the presence of domestic violence is associated with deleterious outcomes for children. Policy implications are discussed and include the need for the Federal reauthorization of welfare legislation that would require TANF programs to screen and provide services for applicants experiencing domestic violence, mental health problems, and alcohol or other drug problems. Glossary