On the basis of the principle that patients have the right to be treated in the least restrictive setting appropriate to their needs, all 368 patients at Northampton State Hospital (Massachusetts) were discharged over a 10-year period. Three-quarters were discharged to community settings. Half of the patients were never rehospitalized, but many others continued to display patterns of recidivism. On the assumption that socially dysfunctional behavior would improve after discharge, the funded community system emphasized assessments, residential placements, and crisis intervention and deemphasized treatment. The findings raise many questions about the efficacy and wisdom of attempting to serve an entire state hospital population in the community.