This article examines the residential and income mobility of 403 low-income Chicago families within a context shaped by welfare and public-housing reforms implemented in the mid-1990s. We assess the extent to which sample members became less poor and less isolated in economically and racially segregated areas in the years following implementation of these reforms. Sample members experienced marked income gains between 1999 and 2002, but the average income reaches a plateau at less than $16,000 per year. Despite significant residential mobility, there was only a slight reduction in the economic segregation of sample members and no discernable change in racial segregation.