I have tried to demonstrate how experiences with individual psychotherapy and milieu work within a mental hospital, over a number of years, have brought about an increasing understanding concerning the basic importance of a therapeutic <i>attitude</i> by those working in mental health services, and also the importance of well trained psychotherapists as models and supervisors. Increasing insight into psychodynamic and social factors, have also contributed to a process within the institution. Individual psychotherapy in the hospital has met with its limitations, due to ego weakness on the part of the patients, the lack of experienced psychotherapists, and the necessity of integrating psychotherapy according to several other offers of treatment and rehabilitation. This development led to a reorganization of the whole treatment milieu, towards a more consequent group system, in which the total therapeutic resources, including patients and staff, have been utilized in a better way. Even this has met with its limitations, partly due to human irrationality and the complexity of group processes, and partly due to the limitations which are built into such a large hospital system and the resulting value conflicts. We now find ourselves at a third stage of development, in which the trend shifts towards more outpatient activity, and towards more work with patients’ families and their social situation.