A special challenge for reintegrating the deinstitutionalized chronically mentally ill patient into rural communities has been especially felt in southwestern Virginia, where over 60% of the chronic population has been placed in residential facilities from other parts of the commonwealth. Highlands Mental Health Services, a private, nonprofit community mental health center, has solved problems of funding, staffing, and delivering the most appropriate services for the patient by joining forces with state and county governments to initiate a psychosocial rehabilitation program called Highlands Clubhouse.Deinstitutionalization of mental hospitals has had an impact not only on the cities of our country. A very special challenge for reintegrating the chronically mentally ill patient into small, more intimate rural communities has been especially felt in southwestern Virginia. The catchment area of Highlands Mental Health Services has an abundance of facilities that provide residential care for adults and more than adequately serve the total county propulation of 40,000. Because of the proximity of the Highlands Mental Health Services to the regional state hospital, many patients without similar resources in their home communities were placed at Highlands. In fact, 60% of the total aftercare caseload were originally residents of 46 different localities in the commonwealth of Virginia, three other states, and Washington, D.C. Money for mental health services has not followed these clients. Questions of funding, staffing, and delivering the most appropriate services for the patients became critical for the pri-Highlands Mental Health Services is located at 158 West Valley Street, Abingdon, VA 24210. Appreciation is expressed to Ron Brizendine, Peggy Wright, and Bill Pickels along with the 55 members, for their contribution to the Highlands Clubhouse program described in this paper.