OBJECTIVE: To provide comprehensive information on expenditures for mental health and substance abuse services for a large number of people with severe mental illnesses, this study examined use of major types of clinical-medical mental health and psychiatric rehabilitation services over a one-year period. METHODS: Data were obtained for 1,890 clients in ten public county-based nonmetropolitan mental health systems in Wisconsin. Expenditures were for services provided with public funding, including local sources of funding, Medicaid, and Medicare. Data about services and expenditures were obtained from county records and unduplicated Medicaid claims for 12 months in 1989 and 1990. RESULTS: Expenditures per client averaged $10,995 for one year ($13,992 in 1994 dollars), with a maximum of $95,093. Expenditures for community-based outpatient services, including residential care and vocational services, represented 53.5 percent of all expenditures; residential care accounted for 12.4 percent and vocational services for 5.7 percent. Overall, 46.5 percent was spent for institutional care, with inpatient hospital care accounting for 12.6 percent. Approximately 40.6 percent of total expenditures were for services not typically covered under managed care plans. CONCLUSIONS: Expenditures for community-based care accounted for more than half of total expenditures. Expenditure patterns revealed the important role of social and rehabilitation services, a role that must be continued in managed care arrangements if they are to provide adequate services for people with severe mental illnesses.