The need for mental health services coordination is discussed in this report. It is noted that, without coordination, government units and service providers can operate independently and in competition with one another. The move to deinstitutionalization is discussed, including the lack of service coordination resulting from this move and the failure of deinstitutionalization to meet the needs of the seriously mentally ill. Funding practices which encourage uncoordinated, incomplete care are reviewed. Legislative guidelines to ensure coordinated care are described and include such things as requiring interagency agreements, identifying coordination priorities, and instituting a no-refusal policy among all system elements. Particular state laws for identifying and combating coordination problems are presented. Future funding and service implications for state and local government are discussed. Case studies from Missouri and Pennsylvania are presented. References are listed. (ABL)