As in other countries worldwide, adults with severe mental illness (SMI) in Brazil are disproportionately infected with HIV relative to the general population. Brazilian psychiatric facilities lack tested HIV prevention interventions. To adapt existing interventions, developed only in the US, we conducted targeted ethnography with adults with SMI and staff from two psychiatric institutions in Brazil. We sought to characterize individual, institutional, and interpersonal factors that may affect HIV risk behavior in this population. We conducted 350 hours of ethnographic field observations in two mental health service settings in Rio de Janeiro, and 9 focus groups (n=72) and 16 key-informant interviews with patients and staff in these settings. Data comprised field notes and audiotapes of all exchanges, which were transcribed, coded, and systematically analyzed. The ethnography identified and/or characterized the institutional culture: (1) patients' risk behaviors; (2) the institutional setting; (3) intervention content; and (4) intervention format and delivery strategies. Targeted ethnography also illuminated broader contextual issues for development and implementation of HIV prevention interventions for adults with SMI in Brazil, including an institutional culture that did not systematically address patients' sexual behavior, sexual health, or HIV sexual risk, yet strongly impacted the structure of patients' sexual networks. Further, ethnography identified the Brazilian concept of "social responsibility" as important to prevention work with psychiatric patients. Targeted ethnography with adults with SMI and institutional staff provided information critical to the adaptation of tested US HIV prevention interventions for Brazilians with SMI.