sychiatric services have undergone a paradigm shift since the 1950s towards providing care in the community away from the mental institutions, a process called deinstitutionalization. In Malaysia, deinstitutionalization started in the 1970s, with decentralization of services from mental institutions to general hospital and primary health care settings. The mission was to downsize mental hospitals, expand services at the general hospitals with psychiatric facilities and empower staff at other hospitals and primary health centers (PHCs) to develop services for clients at their localities. Since then, hospital-based community psychiatric service (HCPS) at the general hospital setting has been a developing intervention targeted for patients with severe mental illnesses (SMIs). These services include the delivery of medications and a variety of psychosocial interventions at or nearest to the patients’ homes. Up to date, the services, even though faced with challenges, have been implemented in many hospitals with different levels of resources and therefore different outcomes. In a few different hospitals, these services have been proven to reduce rate of psychiatric hospitalization, rate of transfer of patients to mental hospitals, rate of hospitalization among patients with previous multiple hospitalization, and to improve the rate of symptom remission and quality of life among patients receiving the services. The number of occupied psychiatric beds in mental hospitals has also reduced with different extents between mental hospitals. In conclusion, HCPS is an important service component in the whole picture of deinstitutionalization which deserves better support in terms of budget and manpower.