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This study examined patient and treatment variables associated with patients dropping out of psychiatric treatment, drop-outs' reasons for terminating treatment, and the relationship between drop-out and patient satisfaction. The term "drop-out' was defined as termination of treatment despite therapeutic need. In a cohort of 131 first-admission psychiatric patients, 26% of these subjects dropped out of treatment during the first year. Multivariate analysis showed that dropping out was predicted by (a) living alone, (b) unemployment, (c) young age and (d) change of treatment service within the last month demanded by the patient against medical advice. Variables such as gender, diagnosis, mode of admission, type of hospital ward, level of treatment, transfer in accordance with treatment needs and inappropriate transfer caused by the treatment system were all non-significant. The drop-outs were markedly less satisfied with both the outcome and various aspects of the treatment process than those who did not drop out. The most common reasons given by the drop-outs for terminating treatment were dissatisfaction with care (44%) and no need for further treatment (20%). Greater knowledge of the factors related to drop-out might increase the likelihood of keeping patients in treatment.