Functional impairments due to cognitive dysfunction may contribute to homelessness. In the few studies of cognitive impairment in homeless individuals, impairment rates vary widely. Investigations measuring general intellectual abilities have found the majority of intelligence quotient (IQ) scores falling in the low average range. We examined the following hypotheses: (1) prevalence of cognitive and functional capacity impairment in the sheltered homeless will be greater than in the general population; (2) lower levels of cognitive functioning will add to psychiatric measures in predicting poorer housing outcomes and lower rates of compliance with case manager and medical appointments; (3) case managers will overestimate their homeless clients' IQ and ability to live independently. One hundred consecutively enrolled residents of a large homeless shelter were recruited over 14 months. Participants performed in the average range on measures of premorbid IQ, current IQ, and general cognitive impairment, but scored in the low average range on measures of processing speed and functional capacity. Significant percentages of the sample performed >1 SD below the mean on tests of premorbid IQ (23%), vocabulary (22%), processing speed (30%), and functional impairment (48%). None of the cognitive, functional, or psychiatric predictors were associated with housing outcomes, housing violations, case management appointment attendance or medical appointment attendance. Case managers overestimated their clients' IQs by about 20 points when a client's IQ was low and generally overestimated their clients' ability to live independently. Case managers correctly identified IQs in the intellectually disabled range only one time out of five. We did not find evidence to support the use of cognitive screening for use in predicting housing outcomes or service utilization. However, we found that a significant percentage of homeless individuals had cognitive, intellectual, and functional impairments that were likely to be unrecognized by shelter staff. Therefore, routine cognitive screening and feedback is recommended to improve the accuracy of staff expectations and to identify individuals for whom disability entitlements should be pursued.