This study measures the effect of a high-expectation and a low-expectation environment on discharged long-term mental patients randomly assigned to one of two community settings. The high-expectation setting includes a halfway house, a daytreatment center, and a rehabilitation workshop. It demands much in the way of mobility, planning, and accepting responsibility. Low-expectation patients go to boarding homes where docility is valued and little initiative is expected. The boardinghome group is not really in the community. It is like a small ward moved to a community setting. The high-expectation group has a higher rehospitalization rate, but a longer time out of the hospital with a higher level of instrumental performance. The high-expectation group is less segregated, is less likely to be labeled as deviate, and is less stigmatized.