Resident and staff activity was observed in two hospital-based staffed houses for adults with severe or profound mental handicap, and seriously challenging behaviours. The results indicated that: (1) staffing resources were inefficiently deployed, leading to low levels of support being provided to service users; (2) staff attention was inequitably distributed across users, individuals showing the highest levels of seriously challenging behaviours received disproportionately more staff attention; (3) users spent little of the time they were observed engaged in constructive activities. Comparisons with data collected previously on four of the users in institutional settings indicated that: (4) no overall changes occurred in either user participation in constructive activities or (5) duration of challenging behaviours; and (6) overall, more staff contact was provided in the specialized housing projects compared to previous institutional settings. The results are discussed in terms of the determinants of quality in residential provision for people with seriously challenging behaviour.