Over the past two decades, the chronic mentally ill elderly have begun to receive care in residential health care facilities (RHCF) such as domiciliary care, intermediate care, and skilled nursing facilities. While there is justification for this increase, as the mentally ill elderly also present with significant physical illnesses, there are presently more chronic mentally ill elderly residents of RHCFs than of state mental hospitals. The need to provide care to the mentally ill in the RHCF is expanding. Not only are patients admitted with a primary diagnosis of mental illness, many are admitted with unreported mental illnesses and others develop illnesses while institutionalized. Related key issues include accurately defining patient needs so as to respond appropriately, and addressing the patient's desire to be placed homogeneously by type of need. Several recent reports indicate the efficacy of behavioral intervention programs for the chronic mentally ill in RHCFs. This paper reviews those reports and a report on the preliminary findings of the impact of a staff psychologist on the provision of mental health services in eight RHCFs. (Author)