OBJECTIVES: Examine arrest outcomes for adults with severe mental illness (SMI) treated with second generation atypical antipsychotics (SGAs), first generation antipsychotics (FGAs) or no medication. METHODS: Continuous medication episodes lasting at least 60 days between 2004 and 2008 were examined (N individuals=36,519; N episodes=222,928). Medication episodes were coded as: 1) SGA -- clozapine, risperidone, olanzapine, quetiapine, ziprasidone, aripiprazole, or RLAI; 2) FGA -- any other antipsychotic medication; or 3) none. Outpatient services included at least one behavioral health visit every 30 days of an episode. Data are from Florida’s Medicaid program and Department of Law Enforcement. Arrest was modeled as a function of medication controlling for time, outpatient treatment, and relevant demographic and diagnostic characteristics using survival analysis. Models also adjusted for the baseline propensity to receive an SGA. RESULTS: Five percent of medication episodes contained an arrest. There was a trend (p=0.10) for the main effect of SGA episodes to reduce arrests compared to FGA episodes; however, the interaction between outpatient services and SGA episodes was significant (Hazard Ratio [HR]: 0.80; 95% Confidence Limits [CL]: 0.65-0.99; p<0.05) such that at least one outpatient visit every 30 days of an SGA episode reduced arrests compared to FGA episodes. Compared to no medication episodes, the interaction between outpatient treatment by SGA episodes reduced arrests (HR: 0.87; 95% CL: 0.76-0.99; p<0.05) whereas outpatient treatment by FGA episodes did not reduce arrests. Substance abuse, medication gaps, and prior arrest increased risk of subsequent arrest. CONCLUSIONS: There was a statistically significant interaction between outpatient visits and treatment that indicated an association between a reduced risk of arrest for SGAs compared to FGAs and no medication periods. These findings suggest the importance of both effective antipsychotic medications and outpatient interventions to reduce arrests in adults with SMI.