Hungary has a tradition both in biological psychiatry and psychotherapy, and for decades developed together with neurology. From the mid 1980s the speed of development of psychiatry started lagging behind expected standards. Psychiatric care, research and teaching were hit hard in 2007 by unprecedented closures of facilities and budget reductions. Although suicide rates have decreased since the mid 1980s, the country has still the second highest rate in the European Union. The high prevalence of alcohol use and the rapidly increasing prevalence of illicit drug use contribute to comorbidity and related behavioural issues, including the increased frequency of severe violent events committed by people with psychiatric disorders, which have not been properly addressed. The country expects the first major restructuring of its healthcare starting in 2012 since the major political changes of 1989/1990. The profession, patients and their caregivers should use this opportunity to modernize psychiatry in Hungary.