Of the 720 emotionally disturbed children under 18 years of age in state mental institutions, 150 were selected by the Illinois Interdepartmental Committee for intensive study; 35 youths were also selected by the Illinois Youth Commission as being in need of mental treatment. Two schedules were designed for automatic data processing and cases were reviewed by two committee members, two social workers, and two child psychiatrists. The 17.8% who were designated as inappropriately hospitalized more often presented problems in management and training (as from moderate to severe retardation) and none was psychotic. The 8.6% judged hospitalized for an inappropriately long time were characterized by socially unacceptable behavior due to psychotic break. Findings and recommendations considered the institutions' programs, comprehensive treatment plan for each child, release planning and aftercare, the roles of disciplines, case records, and communication between agencies. The lack of community resources, early problem identification and prevention, modification of the child's environment, community programs to handle the acting out child, and guardianship were judged for each child's community; and the institution-community relationship was treated. (SN)