Drawing on a large random sample of welfare recipients in the post–welfare reform era, this article examines the prevalence of mental health disorders, substance dependence, and physical health or disability, their co‐occurrence with human capital problems, and their relation to employment. Half of the participants have none of these potential barriers to employment. Mental health and human capital problems, when present, tend to occur in isolation about half the time. Women with co‐occurring human‐capital, mental‐health, and physical‐health problems have the poorest work outcomes. The findings suggest the need to design and implement more assessment, referrals, and service provision to support women in meeting the challenges in the transition from welfare to work.