OBJECTIVE: To examine the association between self-reported lifetime diagnosis of mental disorder and health-related outcomes in prisoners during the first six months after release. METHODS: We interviewed 1,324 adult prisoners in Queensland, Australia, within six weeks of expected release and one, three and six months post-release. Outcomes of interest included health service access, housing, employment, substance use and criminal activity. We used multivariate logistic regression to investigate the association between self-reported, lifetime diagnosis of mental disorder and these health-related outcomes post-release, adjusting for pre-existing disadvantage. RESULTS: 43.4% of participants reported a lifetime diagnosis of mental disorder. This group had increased crude odds of poor outcomes across all evaluated domains. After adjusting for pre-existing disadvantage, significantly increased odds of poor outcomes persisted in the substance use, mental health, crime and health service access domains. CONCLUSIONS: People with a history of mental disorder experience particularly poor outcomes following release from prison that are not fully explained by pre-existing disadvantage. IMPLICATIONS: Evidence-based transitional programs for prisoners with a history of mental disorder should be provided at a level commensurate with need.