OBJECTIVES: This analytical review is intended to update the author's earlier writings on the position of the state mental hospital within the spectrum of services for long-term mental patients and to provide perspective for the next generation of service planners. METHODS: Findings and commentary are organized around four major questions. First, what is the prevailing view of state mental hospitals today, and how does it compare with the view that existed in the first half of this century? Second, what individuals tend to be served in state mental hospitals today? Third, what has been the fate of mentally ill persons who are no longer served in state mental hospitals? Fourth, what is an appropriate role for the state mental hospital in today's uncertain and rapidly changing systems of care? Source material consists of periodical articles suggested in MEDLINE searches, plus newspaper reports, recent books on mental health service systems, and a variety of writings found in the "fugitive" literature generally not indexed in traditional archives. RESULTS AND CONCLUSIONS: Individual state mental hospitals vary in the composition of their resident populations, the content of their services, and the overall quality of their care. Although they have been superseded by community-based service structures in some places, they continue in general, as the result of their multifunctionality, to occupy a critical place in systems of care. Renewed efforts to integrate them as full partners within those systems must be undertaken.