OBJECTIVE: The study used a societal costs model to estimate costs of assertive community treatment for persons with severe mental illness. METHODS: Resource use and cost data were collected for mental health, health, social, and law enforcement, and other maintenance services and family services for 94 clients enrolled in a mobile community treatment program in Madison, Wisconsin. Data sources included self-reports of clients and family members, private and public agency records, and insurance claims files. To make more precise estimates, outcome definitions were broadened, data sources were cross-validated, and prices of services were calculated independently of agencies' charges for such services. RESULTS: Average societal costs for participants in the study were estimated at $23,061 in 1988 ($29,965 in 1994 dollars). Use of a less sophisticated model with less careful costing methods would have resulted in an estimated average cost at least 30 percent lower. Maintenance costs (cash payments from government programs, subsidies, and in-kind services) were the largest cost component, followed by mental health treatment, family burden, indirect treatment, and law enforcement. Most of the financing for these services came from the public sector (85 percent). CONCLUSIONS: Accurate, reliable, and consistent measurement of societal costs will aid in the complex task of rationing fixed health and mental health care budgets.