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The present study focused on identifying risk factors for early readmission of patients discharged from an urban community hospital. Retrospective chart reviews were conducted on 207 consecutive inpatient psychiatric admissions that included patients who were readmitted within 15 days, within 3 to 6 months, and not admitted for at least 12 months post-discharge. Findings indicated that a diagnosis of schizophrenia/schizoaffective disorder (OR = 18; 95% CI 2.70–117.7; p < 0.05), history of alcohol abuse (OR = 9; 95% CI 1.80–40.60; p < 0.05), number of previous psychiatric hospitalizations (OR = 2; 95% CI 1.28–3.73; p < 0.05), and type of residence at initial admission (e.g., homeless, OR = 29; 95% CI 3.99–217; p < 0.05) were significant risk factors for early readmission, where OR compares readmission group 1 versus group 3 in the multinomial logistic regression. Initial positive urine drug screen, history of drug abuse or incarceration, and legal status at initial admission did not predict early readmission. Reducing the risk factors associated with psychiatric readmissions has the potential to lead to the identification and development of preventative intervention strategies that can significantly improve patient safety, quality of care, well-being, and contain health care expenditures.