AbstractNinety‐six per cent of mentally ill elderly persons who are not in the community reside in nursing homes, yet the mental health care they receive here is minimal or unavailable. Data are presented from the 1984 pretest of the National Nursing Home Survey. Five hundred and twenty‐six patients in 112 nursing homes in four US metropolitan areas were sampled. Overall, the prevalence of mental disorder was found to be 68%; 39% of the patients had a diagnosis of organic brain syndrome (OBS) and 29% had other mental disorders (OMD). Only about one‐third (31%) of residents had no mental disorder. These three patient groups, those with OBS, those with OMD, and those with no mental disorder, were compared on demographic, clinical, and treatment characteristics. The authors conclude that the balance between the Federal and State roles in financing care for the mentally ill in nursing homes needs to result in a more equitable system of care which does not discriminate against the mentally ill. Further, the mental health service system needs to assume greater responsibility for this population. While signnificant attention is given to residents' physical needs, behavioural and emotional problems are seriously negl