The process of deinstitutionalization of people with chronic mental disabilities in Western countries has often produced a spatial concentration of ex-psychiatric patients, and of mental health services, in inner city urban neighbourhoods. In this paper, the geography of mental health services and patients in Dunedin is examined, and it is shown that a concentration does exist in one neighbourhood. The history and characteristics of this neighbourhood are described. The key factors in contemporary New Zealand that have generated this spatial pattern are then considered, and Dunedin's centralized mental health geography is contrasted with the North American "zone of dependence" phenomenon. The paper concludes by considering to what extent Dunedin's emergent geography of mental health provides a supportive environment for people with mental illnesses, and exploring the policy implications for health care planners and service providers.