The authors discuss what can be learned from our experience with deinstitutionalization. The deinstitutionalization of mentally ill persons has three components: the release of these individuals from hospitals into the community, their diversion from hospital admission, and the development of alternative community services. The greatest problems have been in creating adequate and accessible community resources. Where community services have been available and comprehensive, most persons with severe mental illness have significantly benefited. On the other hand, there have been unintended consequences of deinstitutionalization-a new generation of uninstitutionalized persons who have severe mental illness, who are homeless, or who have been criminalized and who present significant challenges to service systems. Among the lessons learned from deinstitutionalization are that successful deinstitutionalization involves more than simply changing the locus of care; that service planning must be tailored to the needs of each individual; that hospital care must be available for those who need it; that services must be culturally relevant; that severely mentally ill persons must be involved in their service planning; that service systems must not be restricted by preconceived ideology; and that continuity of care must be achieved.