Assertive Community Treatment (ACT) is a multidisciplinary team approach to community care treatment, mainly characterised by small caseload and individualised care. The aim of the present study was to identify predictors of clinical outcome in ACT using an observational design. Three ACT Teams were established in The North Denmark Region to treat patients with severe mental illness. The patients were identified and followed in regional and national psychiatric registers, and in social and somatic case registers, 2years before and 2years after inclusion. The results showed that the use of psychiatric hospital services decreased significantly for the 240 included patients. Furthermore, the psychopharmacological profile was improved. No significant change occurred in the consumption of the somatic hospitals. Clinical outcome, defined as halving of admissions or bed days, was in a logistic analysis predicted by the patient's psychiatric use of inpatient service prior to inclusion in an ACT Team.