OBJECTIVE: The study examined several aspects of inpatient psychiatric treatment to determine if differences existed between treatment of African-American and white patients. METHODS: Using a structured chart review, data were collected on 76 African-American and 88 white patients consecutively admitted to an acute inpatient setting with a principal axis I diagnosis of a major mood or psychotic disorder. Racial differences in treatment were examined using analysis of variance and logistic regression to assess the effects of diagnosis and socioeconomic status. RESULTS: Nonpsychotic African-American patients had shorter lengths of stay than white patients with similar disorders. White patients were more likely to be on one-to-one observational status. Clinicians were more likely to order urine drug screens for African-American patients with high socioeconomic status than for comparable white patients. African-American patients with schizophrenic disorders received higher neuroleptic dosages than white patients with similar diagnoses. CONCLUSIONS: Most racial differences cited in earlier studies of psychotic patients were not found or were not statistically significant once socio-economic status and diagnosis were accounted for. However, racial differences related to the detection, phenomenology, treatment, and course of psychotic disorders and the diagnosis and management of alcohol and drug use disorders and personality disorders were found.