Tobacco smoking remains a neglected issue within general psychiatry despite high rates of associated morbidity and mortality. While there has been a coordinated community campaign to reduce tobacco smoking within the general population, mental health facilities have been reluctant to adopt such regulatory controls, and rarely target smoking prevention or treatment. This paper summarizes and discusses evidence relating to the clinical impact of tobacco smoking within inpatient psychiatric settings. A selective review of psychiatric and psychological research on smoking within inpatient settings was conducted, with a particular focus on the influence of smoking on the physical and mental health, pharmacotherapy, and social interactions of patients during their inpatient stay. Patients frequently alter their smoking habits during inpatient treatment, which can affect both their presentation and pharmacotherapeutic management. Smoking also appears to play a central role in social interactions on the ward, with staff frequently using cigarettes to reinforce certain behaviours. Despite current guidelines, mental health professionals rarely address nicotine use among their patients. Nevertheless, programmes that assist patients to quit during an inpatient stay have been shown to be both efficacious and cost-effective. Strategies that address staff concerns and assist in the implementation of effective smoking bans on psychiatric units are also available. Cessation should be a key component of inpatient treatment planning because this setting provides a safe and timely opportunity to help patients quit. A flowchart of interventions that could be incorporated within standard inpatient settings is proposed.