An inpatient psychiatric service was developed in a community hospital in Appalachia by building on the hospital's existing mental health components, a comprehensive alcoholism program and an inservice training program for general-duty nurses. In its first phase, the program offered a consultation service to help physicians deal with emotional problems of medical-surgical patients and a daytime therapy program for selected patients referred by the consultation service. In the second phase, psychiatric patients were admitted directly from the community and placed in wards throughout the hospital. Eventually a separate 23-bed psychiatric unit was opened. Between 1973 and 1976 more than 2200 patients were treated by the therapy service or as psychiatric inpatients. The author discusses problems that occurred during each phase of development, including a continuing shortage of nursing staff.