Background Whether the presence of caregivers during the hospital stay of patients with mental illness affects the length of hospital stay (LoS) remains inconclusive. Aims (1) To determine the average LoS and the associated factors, and (2) to determine the role of caregivers’ presences during inpatient stay on LoS. Methods We conducted a cross-sectional study in two hospitals in Uganda; one with caregivers and the other without caregivers between July to November 2020. Mann-Whitney U test was used to compare LoS in the two selected hospitals and linear regression was used to determine factors associated with LoS. Results A total of 222 participants were enrolled, the majority were males (62.4%). Mean age was 36.3 (standard deviation (SD) = 13.1) years. The average LoS was 18.3 (SD = 22.3) days, with patients in a hospital without caregivers having a longer median LoS (i.e., (30 (interquartile range (IQR) = 30) vs. 7 (7) days; χ2 = 68.95, p < 0.001). The factors significantly associated a longer LoS among our study participants included; being admitted in a hospital without caregivers (adjusted coefficient [aCoef]: 14.88, 95% CI 7.98–21.79, p < 0.001), a diagnosis of schizophrenia (aCoef: 10.68, 95 %CI 5.53–15.83, p < 0.001), being separated or divorced (aCoef: 7.68, 95% CI 1.09–14.27, p = 0.023), and increase in money spent during the admission (aCoef: 0.14, 95% CI 0.09–0.18, p < 0.001). Conclusion Patients with mental illness in southwestern Uganda have a short LoS (below 28 days), and the stay was much shorter for patients with fulltime caregivers. We recommend caregivers presence during patient’s hospital stay to reduce the LoS and minimize healthcare expenditure.