ObjectiveThe objective of this policy paper is to put recent developments in Dutch mental health reform in an international perspective and draw conclusions for future directions in policy.Context of the caseThe practice of Western psychiatry in the second half and particularly in the last decade of the 20th century has fundamentally changed. Dutch psychiatry has traditionally been prominently bed-based and various policies in the last ten years have been intended to reduce the influence of the mental hospitals. Until the mid-1990s, this had not resulted in reducing the psychiatric bed rate in comparison to other countries. Since then, there have been rapid, dramatic changes.Data sourcesWe summarised two recent national studies on this subject and placed them in a national and international context, using documents on psychiatric reforms, government and advisory board reports and reviews on deinstitutionalisation in different countries.Case descriptionThe practice of psychiatry in the second half, and particularly in the last decade, of the 20th century has fundamentally changed. This has resulted in a spectacular decline in the number of beds in mental hospitals, increased admissions, decreased length of stay, closure of the large asylums and in community treatment away from asylums and in society, although this is a reform process. This article examines how the Dutch mental health care system has developed at the national level. The main topics cover the size, nature, aims and effects of the process of deinstitutionalisation and how alternative facilities have been developed to replace the old-fashioned institutes.Conclusions and discussionThere are two contrasting aspects of deinstitutionalisation in Dutch mental health care: the tendency towards rehospitalisation in relation to the sudden, late, but rapid reduction of the old mental hospitals and their premises; and a relatively large scale for community-based psychiatry in relation to building mental health care centres. Compared to other countries the bed rate in the Netherlands is still among the highest, although it is rapidly decreasing. Lessons from psychiatric reform in other countries emphasise the counterpart of deinstitutionalisation, especially issues such as the quality of alternative community treatment and increasing compulsory admission, while the closing down of old mental hospitals has caused a decrease in the availability of beds. In the Netherlands less attention has been paid to legislation, societal attitudes towards psychiatry, the roles of other care suppliers, the balancing and financing of care, the fate of psychiatric patients from old hospitals, the way to cope with the ever-increasing demand for psychiatric help and the actual quality of psychiatric help. A more integrative policy that includes all these aspects is desirable.