To address the widespread debate about the role of public assistance to the urban poor, the authors determined characteristics of individuals receiving cash assistance and explored the link between cash subsidies and risk behavior. From 1999 to 2000, a representative sample of homeless and marginally housed (HMH) adults living in San Francisco was recruited and interviewed about subsidies, shelter, jail, and drug use. Among 1,156 adults, 87% were ever homeless, 22% currently injected drugs, and 14% were HIV positive. Sixty percent of participants reported that most of their income came from subsidies [mostly subsidized (MS)]. The MS had lower odds of receiving any income from selling drugs or trading sex. Adjusting for HIV infection, the MS had higher odds of sleeping in a hotel [odds ratio (OR)=2.39] or shelter (OR=1.61) compared to the street. The MS had lower odds of injection drug use (OR=0.69) and recent incarceration (OR=0.77). Among San Francisco’s homeless, being MS was positively associated with having shelter and negatively associated with injection drug use and incarceration. These data suggest that government subsidies are associated with positive health behaviors among the urban poor. (Authors)