Research has documented social network instability among people with serious mental illness focusing on (1) psychiatric symptoms that interfere with social skills and interaction and (2) stigma, discrimination, and social rejection. However, the social network consequences of disruptive events that often accompany onset of serious mental illness (e.g., divorce, job loss, and residential instability) are seldom considered. In this study, the relative impact of symptoms, stigma, and secondary disruptive events on membership turnover was examined using data from 100 people experiencing first contact with the mental health treatment system. Findings indicated that disruptive events and, to a lesser degree, psychiatric symptoms predicted membership turnover. A theory of relationship and network dynamics in mental illness integrating insights from the psychiatric, labeling, and social network perspectives is proposed.