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The development and implementation of a psychiatric rehabilitation program is described. Two community- and one hospital-based group programs were set up with the aims of increasing self-efficacy and independence in participants and reducing readmission rates. A program evaluation was conducted that included participant observation and semi-structured interviews of client and staff participants. Results revealed that the needs of those clients taking part in community groups were different from those in the hospital groups. For hospital participants, having information about the hospital and about their treatment was important, whereas community participants needed to deal with their personal problems encountered in community living. Participants from the community reported more positive benefits from the groups than hospital participants. Community participants also saw the groups as providing ongoing support. The need for the implementation of similar programs within the current climate of the deinstitutionalization of mental health services is emphasized.