Psychiatric rehabilitation for people with severe mental illness (SMI) has many documented benefits, but less is known about cultural related aspects. To date, no comparison of psychiatric rehabilitation outcomes between Israeli-Jews and Arabs was carried out. Thus, the purpose of the present study was to compare the outcomes of Israeli-Arabs and Jews consuming psychiatric rehabilitation services. As part of the Israeli Psychiatric Rehabilitation Reported Outcome Measurement project (PR-ROM), a cross-sectional study comparing between different ethnic-religious groups was performed. Data is based on 6,751 pairs of psychiatric rehabilitation consumers and their service providers. The consumers filled questionnaires on quality of life (QoL) and functioning, and their providers completed mirroring instruments. The findings revealed that QoL and functioning ratings were lower among Muslim-Arabs compared to Jews on both consumers’ and providers’ ratings. Among Muslim-Arabs, differences in outcomes according to the service's location were indicated. The observed differences between Israeli-Arab and -Jews with SMI in the PR-ROM point to the need for culturally adapted rehabilitation services that take into account how cultural differences may affect the benefits of such services.