This study examined the effect of chronic stress associated with unemployment on the magnitude of salivary cortisol excretion, on the diurnal rhythm of cortisol, and on cortisol reactivity to acute naturalistic stressors using Experience Sampling Methodology (ESM). Employed (N = 60) and unemployed (N = 60) subjects were studied for 2 days. Subjects were beeped 6 times per day by a preprogrammed wristwatch to assess acute stressors; 25 minutes after each ESM-beep, subjects were beeped a second time for saliva samples. The groups did not differ in their overall cortisol excretion or in cortisol reactivity to acute daily stressors. Compared to employed subjects, unemployed subjects had a diurnal pattern of cortisol excretion with relatively higher morning and lower evening levels. Subjects' daily activities and their locations were associated with diurnal rhythm differences.