BACKGROUND The Department of Veterans Affairs Health Care System (VA) is the largest integrated single payer system in the United States. To date, there has been no systematic measurement of health status in the VA. The Veterans Health Study has developed methods to assess patient-based health status in ambulatory populations. OBJECTIVES To describe the health status of veterans and examine the relationships between their health-related quality of life, age, comorbidity, and socioeconomic and service-connected disability status. METHODS Participants in the Veterans Health Study, a 2-year longitudinal study, were recruited from a representative sample of patients receiving ambulatory care at 4 VA facilities in the New England region. The Veterans Health Study patients received questionnaires of health status, including the Medical Outcomes Study Short Form 36-Item Health Survey; and a health examination, clinical assessments, and medical history taking. Sixteen hundred sixty-seven patients for whom we conducted baseline assessments are described. RESULTS The VA outpatients had poor health status scores across all measures of the Medical Outcomes Study Short Form 36-Item Health Survey compared with scores in non-VA populations (at least 50% of 1 SD worse). Striking differences also were found with the sample stratified by age group (20-49 years, 50-64 years, and 65-90 years). For 7 of the 8 scales (role limitations due to physical problems, bodily pain, general health perceptions, vitality, social functioning, role limitations due to emotional problems, and mental health), scores were considerably lower among the younger patients; for the eighth scale (physical function), scores of the young veterans (aged 20-49 years) were almost comparable with the levels in the old veterans (>65 years). The mental health scores of young veterans were substantially worse than all other age groups (P<.001) and scores of screening measures for depression were significantly higher in the youngest age group (51%) compared with the oldest age groups (33% and 16%) (P<.001). CONCLUSIONS The VA outpatients have substantially worse health status than non-VA populations. Mental health differences between the young and old veterans who use the VA health care system are sharply contrasting; the young veterans are sicker, suggesting substantially higher resource needs. Mental health differences may explain much of the worse health-related quality of life in young veterans. As health care systems continue to undergo a radical transformation, the Department of Veterans Affairs should focus on the provision of mental health services for its younger veteran.