The purpose of this study is twofold: (a) to examine the relationship between individual factors and rehabilitation outcomes of transition youth with disabilities receiving state vocational rehabilitation services and (b) to determine the contextual effects of state unemployment rate on the employment outcomes of transition youth and its potential interactions with personal and service factors. Hierarchical generalized linear modeling was used to analyze Rehabilitation Services Administration Case Service Report (RSA-911) data for fiscal year 2013. Results show that state unemployment rates were found to moderate the relationships between some demographic and service variables and successful competitive employment. These results indicate the importance of contextual variables, such as state unemployment rates, and their impact on the predictive strength of specific personal and service variables on employment outcomes of youth with disabilities. Implications for vocational rehabilitation services and policy, and future research are discussed.