Homelessness among mental patients is frequently associated with deinstitutionalization. In a study to clarify the relationship between homelessness and psychiatric hospitalization, data from Illinois statistical reports and from admission reports of a state hospital that serves about 75 percent of the undomiciled mentally ill population in Chicago were analyzed. The rate of homelessness had increased substantially among psychiatric admissions over the last decade and was even higher among applicants for hospitalization. The homeless had lower admission rates than the domiciled, largely because of differing paths of referral. Nearly 20 percent of the homeless left the hospital against advice, and relatively few were referred to licensed long-term-care facilities. Until various systems develop adequate responses to the problem, both the numbers and the visibility of the homeless mentally ill are likely to increase.