A number of projects have used home treatment (HT) for severely mentally ill people in recent years. This paper intends to define HT and show the main differences between it and other forms of psychiatric community service, present the existing evidence for HT, and discuss eligibility criteria. Studies about HT's efficacy in treating severely mentally ill adults were identified by electronic (MEDLINE, PsycLIT) and manual search. Six studies met these inclusion criteria. Compared to inpatient treatment, HT was equally or more efficacious in respect to reduction of symptom distress, social (re-)integration, and patient and carer satisfaction. Furthermore, direct costs for HT were often lower than for inpatient care. However, the number of relevant studies is limited and knowledge on the long-term effects of HT is sparse.