Jail diversion and forensic community treatment programs have proliferated over the past decade, far outpacing evidence regarding their efficacy. The current study reports findings from a randomized clinical trial conducted in California for frequent jail users with serious mental illness that compares a forensic assertive community treatment (FACT) intervention with treatment as usual (TAU). Outcomes are reported at 12 and 24 months post-randomization for criminal justice outcomes, behavioral health services and costs. At 12 months, FACT vs. TAU participants had fewer jail bookings, greater outpatient contacts, and fewer hospital days than did TAU participants. Results of zero-inflated negative binomial regression found that FACT participants had a higher probability of avoiding jail, although once jailed, the number of jail days did not differ between groups. Increased outpatient costs resulting from FACT outpatient services were partially offset by decreased inpatient and jail costs. The findings for the 24 month period followed the same pattern. These findings provide additional support for the idea that providing appropriate behavioral health services can reduce criminal justice involvement.