Abstract-Communities that are struggling to provide effective treatment for the challenging population of severely mentally ill clients who use alcohol and drugs have a growing research base on which to make policy decisions. Integrating outpatient treatment for mental health and addictive disorders appears to be more effective than treatment in two separate systems. Integrated treatment at a single site allows for individualizing treatment priorities without fragmenting care. Harm reduction approaches provide a low threshold entry, which can be followed by interventions to enhance motivation. Managing patient benefits to discourage drug use reduces the likelihood of their becoming homeless, hospitalized or incarcerated. Inadequate treatment capacity plays a large role in the growing number of disturbed clients who end up in the criminal justice system. Effective community treatment requires vigorous collaboration between care providers. Ultimately, professional training programs need to produce clinicians who are competent and comfortable addressing alcohol and other drug use to implement effective treatment systems.