Results from the analysis corroborate the criminal sanction and employment hypotheses, suggesting that the potential penal costs and the prospect of economic hardships associated with dropping out of residential treatment might be effective deterrents against premature treatment termination. The broader social context in which the treatment of drug-abusing offenders took place mattered; it had a direct impact on clients’ decision to stay or leave treatment. This analysis represents the first step in the exploration of the utility of the rational choice model of retention among criminal justice clients of drug abuse treatment. Previous drug treatment retention research has been limited by a restricted range of explanatory variables. In this study, the analysis of treatment retention is cast within the tradition of a rational choice model and presents three environmental hypotheses that may help explain the potential influence of environmental factors on mandated clients’ treatment experiences. Retention data from 1,984 drug-abusing felons diverted for long-term residential treatment were analyzed to test the 3 hypotheses that criminal sanctions against drug offenses, violence in local drug markets, and lack of legitimate job opportunities act as deterrents against premature termination of treatment. Tables, references