Research has shown complex interactions between unemployment and mental health. However, the prevalence of specific mental disorders, utilization of mental health care services and influences on help-seeking behavior have been investigated surprisingly little in the past. In this study, we investigated a sample of long-term unemployed people in a cooperation program of the local unemployment agency and a psychiatric university hospital in a larger city in Germany. Mental disorders, treatment history, accordance of treatment to national treatment guidelines and factors influencing previous treatment were assessed. Participants (n = 879; male 56%, female 44%, mean age 43.9 years) showed a high psychiatric morbidity, mostly with diagnoses from the ICD-10 categories F1 (22%), F3 (61%) and F4 (68%). Currently, 18% were in psychiatric treatment, 6% were in psychotherapeutic treatment, and 28% received psychopharmacological treatment. Mostly young men underutilized the psychiatric–psychotherapeutic system, with middle-aged men and women being most frequently in psychopharmacological treatment. Of those treated, only about 10% of the subjects currently received a treatment according to national guidelines. The utilization of psychotherapeutic treatment was strikingly poor. This study identified high psychiatric morbidity and severe treatment gaps in unemployed people. These results can help to target subjects with specific needs for interventions and to modify counseling programs.