Much has gone wrong with deinstitutionalization. To get back on course, the author says, we should acknowledge that while deinstitutionalization was a positive step, it has gone too far—that some of the long-term mentally ill now in the community need highly structured residential care. The long-term mentally ill should be made the highest priority in public mental health, and a comprehensive system of care that recognizes their heterogeneity needs to be established. Vigorous rehabilitation efforts aimed at helping them attain higher levels of functioning should be continued, but mental health professionals should also give high priority to those who function less well and recognize the gratification that can be derived from working with them. The more favorable long-term outcome of schizophrenia should not be confused with the lesser improvements that can be made over the short or intermediate term. Professionals need to come to grips with the bureaucracy, politics, and inefficiency of our largest cities and should also actively advocate for involuntary treatment when it is clinically indicated.