AbstractPatients with combined general psychiatric and addictive disorders are a major public health problem in the US, and are being increasingly recognized as such world‐wide. The authors describe a model treatment system for such patients in one municipal hospital in New York. It is composed of three complementary units: a locked ward, a halfway house and a day program. Treatment is based on a peer leadership approach coupled with professional treatment, and provides multiple levels of care to address the needs of respective patients. Of 464 admissions evaluated and treated, most were from disadvantaged minorities, homeless and abusers of cocaine. All were admitted with acute psychiatric or perinatal presentations, and carried Axis I diagnoses in addition to their substance abuse. Clinical experience over 6 years is reviewed, suggesting the feasibility of reorganizing general hospital psychiatric services to address the needs of the dually diagnose