BACKGROUND: Many with a mental illness have an impoverished everyday life with few meaningful activities and a sedentary lifestyle. The study aim was to evaluate the effectiveness of the 16-week Balancing Everyday Life (BEL) program, compared to care as usual (CAU), for people with mental illness in specialized and community-based psychiatric services. The main outcomes concerned different aspects of subjectively evaluated everyday activities, in terms of the engagement and satisfaction they bring, balance among activities, and activity level. Secondary outcomes pertained to various facets of well-being and functioning. It was hypothesized that those who received the BEL intervention would improve more than the comparison group regarding activity, well-being and functioning outcomes. METHODS: BEL is a group and activity-based lifestyle intervention. CAU entailed active support, mainly standard occupational therapy. The BEL group included 133 participants and the CAU group 93. They completed self-report questionnaires targeting activity and well-being on three occasions - at baseline, after completed intervention (at 16 weeks) and at a six-month follow-up. A research assistant rated the participants' level of functioning and symptom severity on the same occasions. Non-parametric statistics were used since these instruments produced ordinal data. RESULTS: The BEL group improved more than the CAU group from baseline to 16 weeks on primary outcomes in terms of activity engagement (p < 0.001), activity level (p = 0.036) and activity balance (p < 0.042). The BEL group also improved more on the secondary outcomes of symptom severity (p < 0.018) and level of functioning (p < 0.046) from baseline to 16 weeks, but not on well-being. High intra-class correlations (0.12-0.22) indicated clustering effects for symptom severity and level of functioning. The group differences on activity engagement (p = 0.001) and activity level (p = 0.007) remained at the follow-up. The BEL group also improved their well-being (quality of life) more than the CAU group from baseline to the follow-up (p = 0.049). No differences were found at that time for activity balance, level of functioning and symptom severity. CONCLUSION: The BEL program was effective compared to CAU in terms of activity engagement. Their improvements were not, however, greater concerning other subjective perceptions, such as satisfaction with daily activities and self-rated health, and clustering effects lowered the dependability regarding findings of improvements on symptoms and functioning. Although the CAU group had "caught up" at the follow-up, the BEL group had improved more on general quality of life. BEL appeared to be important in shortening the time required for participants to develop their engagement in activity and in attaining improved quality of life in a follow-up perspective. TRIAL REGISTRATION: The study was registered with ClinicalTrial.gov. Reg. No. NCT02619318 .