The patterns of daily living, occupation and leisure activities, skills, behaviour and the structure and organization of living units were assessed for 2 groups of mentally handicapped adults, first in a large hospital and second, a year later in the new local units to which they were transferred. Similar assessments were carried out for individually matched control subjects who remained in the large hospital. For the less severely handicapped, more sociable residents who moved to an NHS hostel in the community, there were significant improvements on several of these measures. For the more severely handicapped, socially aloof people who moved to a ward in a small converted hospital in the district from which they had originally come, some changes on the environmental measures were found, but on the whole the unit was run along similar lines to the wards of the large hospital. There was little change in the pattern of the residents' day to day life. The controls who remained in the large hospital experienced very little change in environmental and life-style measures. The discussion focuses on the interaction between environmental factors and the handicaps of the individuals, and the influence of this interaction upon quality of care and life-style. The study was carried out during the early stages of the rundown to closure of the large mental handicap hospital.