Collaborative care for severe mental illness (SMI) is a community-based intervention, which typically consists of a number of components. The intervention aims to improve the physical and/or mental health care of individuals with SMI. To assess the effectiveness of collaborative care approaches in comparison with standard care for people with SMI who are living in the community. The primary outcome of interest was psychiatric admissions. We searched the Cochrane Schizophrenia Group Specialised register in April 2011. The register is compiled from systematic searches of major databases, handsearches of relevant journals and conference proceedings. We also contacted 51 experts in the field of SMI and collaborative care. Randomised controlled trials (RCTs) described as collaborative care by the trialists comparing any form of collaborative care with 'standard care' for adults (18+ years) living in the community with a diagnosis of SMI, defined as schizophrenia or other types of schizophrenia-like psychosis (e.g. schizophreniform and schizoaffective disorders), bipolar affective disorder or other types of psychosis. Two review authors worked independently to extract and quality assess data. For dichotomous data, we calculated the risk ratio (RR) with 95% confidence intervals (CIs) and we calculated mean differences (MD) with 95% CIs for continuous data. Risk of bias was assessed. We included one RCT (306 participants; US veterans with bipolar disorder I or II) in this review. We did not find any trials meeting our inclusion criteria that included people with schizophrenia. The trial provided data for one comparison: collaborative care versus standard care. All results are 'low or very low quality evidence'.Data indicated that collaborative care reduced psychiatric admissions at year two in comparison to standard care (n = 306, 1 RCT, RR 0.75, 95% CI 0.57 to 0.99).The sensitivity analysis showed that the proportion of participants psychiatrically hospitalised was lower in the intervention group than the standard care group in year three: 28% compared to 38% (n = 330, 1 RCT, RR 0.72, 95% CI 0.53 to 0.99).In comparison to the standard care group, collaborative care significantly improved the Mental Health Component (MHC) of quality of life at the three-year follow-up, (n = 306, 1 RCT, MD 3.50, 95% CI 1.80 to 5.20). The Physical Health Component (PHC) of the quality of life measure at the three-year follow-up did not differ significantly between groups (n = 306, 1 RCT, MD 0.50, 95% CI 0.91 to 1.91).Direct intervention (all-treatment) costs of collaborative care at the three-year follow-up did not differ significantly from standard care (n = 306, 1 RCT, MD -$2981.00, 95% CI $16934.93 to $10972.93). The proportion of participants leaving the study early did not differ significantly between groups (n = 306, 1 RCT, RR 1.71, 95% CI 0.77 to 3.79). There is no trial-based information regarding the effect of collaborative care for people with schizophrenia.No statistically significant differences were found between groups for number of deaths by suicide at three years (n = 330, 1 RCT, RR 0.34, 95% CI 0.01 to 8.32), or the number of participants that died from all other causes at three years (n = 330, 1 RCT, RR 1.54, 95% CI 0.65 to 3.66). The review did not identify any studies relevant to care of people with schizophrenia and hence there is no evidence available to determine if collaborative care is effective for people suffering from schizophrenia or schizophreniform disorders. There was however one trial at high risk of bias that suggests that collaborative care for US veterans with bipolar disorder may reduce psychiatric admissions at two years and improves quality of life (mental health component) at three years, however, on its own it is not sufficient for us to make any recommendations regarding its effectiveness. More large, well designed, conducted and reported trials are required before any clinical or policy making decisions can be made.