OBJECTIVES: This study examined predictors of entry into shelter and subsequent housing stability for a cohort of families receiving public assistance in New York City. METHODS: Interviews were conducted with 266 families as they requested shelter and with a comparison sample of 298 families selected at random from the welfare caseload. Respondents were reinterviewed 5 years later. Families with prior history of shelter use were excluded from the follow-up study. RESULTS: Demographic characteristics and housing conditions were the most important risk factors for shelter entry; enduring poverty and disruptive social experiences also contributed. Five years later, four fifths of sheltered families had their own apartment. Receipt of subsidized housing was the primary predictor of housing stability among formerly homeless families (odds ratio [OR] = 20.6, 95% confidence interval [CI] = 9.9, 42.9). CONCLUSIONS: Housing subsidies are critical to ending homelessness among families. (Authors)