Mental health services in the state of Victoria, Australia, have undergone enormous change over the past 15 years, with the closure of all stand-alone psychiatric hospitals and a shift of resources and services into the community. Although successful overall, various areas cause concern, including pressure on acute beds, a paucity of alternative residential options, and suboptimal integration of government and non-government agencies concerned with the care of people with mental illnesses. Certain groups, notably those with complex symptom sets such as substance use and mental illness, intellectual disability and forensic problems, remain poorly catered for by the system. Finally, community stigma and lack of work inclusion for mentally ill individuals are ongoing challenges.