Part one of this report presents an overview including the historical background, of the problems faced by chronically mentally ill persons. Part two describes the individuals disabled by chronic mental illness and identifies their particular needs, including employment, treatment, and rehabilitation services. It explores the range of treatment, residential and service opportunities in existing systems and focuses on those systems considered to be exemplary. Research and evaluation needs, and the need for increasing public understanding and advocacy services for homeless mentally ill people, are also discussed. Part three deals with financing and focuses on changes in Social Security Act programs, including Medicaid. Recommendations for funding case management services are also included.