In this study, a systematic needs-assessment approach to evaluating the institutional and community service requirements of adult psychiatric inpatients is reported. The Community Placement Questionnaire (CPQ) was completed by professional staff on all patients between the ages of 18-65 residing in a publicly-funded psychiatric hospital. Of the 105 patients surveyed, 65.7% were considered potentially hard to place in the community (6.7% were nominated for permanent placement in the institution), and 34.3% were considered easy to place. The findings indicate that successful planning for community-based mental health services requires the four essential elements of the protected hospital environment, treatment, augmentation in psychosocial rehabilitation programming and availability of supports and services in the community. Specific strategies for transition from institutional-based care to community care are discussed.