Objective The aim of the present study was to examine care pathways and characteristics of mental health consumers participating in both hospital- and community-based residential rehabilitation programs. Methods An audit of consumers (n=240) in all publicly funded residential rehabilitation units in Queensland was performed on the same day in 2013. Data collection focused on demographic characteristics, clinical information and measures of consumer functioning. Results Significant differences emerged for consumers in community- and hospital-based services with regard to age, length of stay, functioning, Mental Health Act status, guardianship status, family contact and risk of violence. Consumers in hospital-based programs have more severe and complex problems. Conclusions Consumers in residential rehabilitation units have high levels of disability, poor physical health and high levels of vulnerability. Nonetheless, it is likely that a sizeable proportion of consumers occupying rehabilitation beds in Queensland could be discharged if more 'step-down' options to move patients on were available. What is known about the topic? A small subgroup of people with severe and complex mental health problems is likely to require time in a residential rehabilitation program. This group is characterised by failure to respond to treatment, severe negative symptoms and some degree of cognitive impairment. What does this paper add? Patients currently occupying residential rehabilitation beds in Queensland have high levels of disability, poor physical health and high levels of vulnerability. Patients in hospital-based programs are more severely disabled than those in community-based programs. What are the implications for practitioners? It is likely that a sizeable proportion of patients occupying rehabilitation beds in Queensland could be discharged if more 'step-down' options were available. Future planning initiatives need to focus on developing a greater array of community support options to facilitate the discharge of people from residential services.