Tertiary care patients with chronic fatigue were followed for 2.5 years to determine if changes in physical and psychological status were associated with improvements in chronic fatigue, physical functioning, and return to work. Results indicated that improvement in psychological symptoms, DSM-III-R disorders, physical examination signs, and changes in whether the patient continued to meet criteria for chronic fatigue syndrome (CFS) were associated with recovery from fatigue, improved functioning, and return to work. Patients who never met CFS criteria or only met criteria at the initial assessment, reported improved physical functioning. Patients whose psychiatric disorders and physical examination signs were still present at a mean follow-up time of 2.5 years were more likely to have persistent fatigue and work disability. Loss of physical examination signs was a significant independent predictor of improved functioning and return to work. These results suggest that psychiatric status, as well as physical status, are associated with recovery from chronic fatigue.