This study followed up a ward group of long-term, mainly schizophrenic patients after transfer from Bexley Hospital, a large institution in South East London, to small purpose built rehabilitation unit in a distant hospital, and used a matched control group of patients remaining in Bexley Hospital for comparison. There was no pattern of symptomatic improvement or deterioration with time in either group, but social functioning and behaviour did improve in those transferred. The patients transferred were well informed about the process, became more favourable about the medical advice offered to them but remained sure, as did patients in the control group, that they wanted to leave hospital eventually. We suggest that the successful transfer of patients between hospitals must involve clear information to prepare patients and relatives, the consent of patients, staff enthusiasm, the provision of a full range of services after transfer, including occupational therapy, and staff continuity.