Effective discharge planning can contribute significantly to preventing homelessness. As part of a larger continuum of care, this process can help people reach goals of stable housing, recovery, and increased quality of life in the community. Discharge planning identifies and organizes services a person with mental illness, substance abuse, and other vulnerabilities needs when leaving an institutional or custodial setting and returning to the community. A three-component model is presented, relating discharge planning to institutional assessment and treatment, and to community services. Service challenges, innovative programs (based on a state-by-state analysis), and recommendations for enhancing discharge planning also are discussed. ER -