This study investigates the extent and implications of cohabitation and marriage among U.S. welfare recipients. An analysis of four data sets (Current Population Survey, National Survey of Families and Households, Panel Study of Income Dynamics, National Longitudinal Survey of Youth) shows significant number of cohabitants among recipients of AFDC. An even more surprising finding is the large number of married women on welfare. The study also reports the results of a telephone survey of state AFDC agencies conducted to determine state rules governing cohabitation and marriage. The survey results indicate that, in a number of respects, AFDC rules encourage cohabitation. Finally, the study conducts an analysis of the impact of AFDC rules on cohabitation, marriage and single motherhood and finds weak evidence in support of incentives to cohabit.