This article discusses the development of the Community Mental Health Centers in the USA, especially with regard to problems that have emerged recently. The difficulties in outcome evaluation are described, stressing the political factors impinging on such research. The question of discharged State Hospital patients who have made only a marginal adjustment in the community — 'community chronicity' — is still not adaequately resolved. Some evidence of a developing backlash against the Community Mental Health Movement is presented and the encroachment of bureaucratic requirements on clinical time is noted. Only 500 out of a projected 2000 Centers are operating. It seems however unlikely that any additional funds will be authorized, at least until more progress is made in resolving the present difficulties. Experience indicates that future governmental decisions in this area will only partially reflect psychiatric thinking.