This study examined the racial distribution of dual-diagnosis clients in public sector residential mental health and drug treatment settings. In a sample of 179 dual-diagnosis clients, there was a significantly larger proportion of blacks in the drug treatment cohort than the mental health cohort. There were black-white differences in the types of substance use disorders found, but not in the types of mental health disorders. Diagnostic and drug use pattern differences did not account for the differential racial distribution in the two settings. However, the racial distribution was explained by the recent history of service use in the two treatment sectors. In the 2 years after study entry, blacks were less likely than whites to receive mental health treatment and whites were less likely than blacks to receive drug treatment. The implications of these findings regarding the appropriate treatment for dual-diagnosis blacks and whites in the public sector are discussed.