Key Points • The quality of the environment is important to client recovery and rehabilitation. • The preferred environment for the care of the mentally ill across time has been the home. • Environmental strategies in the care of the mentally ill became more important in the eighteenth century when it was noticed that patients were more manageable in a pleasant environment. • Confinement of the mentally ill in large public asylums was largely an innovation of the 19th century. • The Therapeutic Milieu is a consciously organised environment. • Maxwell Jones in the USA and Thomas Main in the UK pioneered the concept of the hospital and environment as treatment tools. • The goals of the therapeutic milieu are containment, structure, support, involvement, validation, symptom management, and maintaining links with family and the community. • The principles on which the therapeutic milieu is based include: open communication; democratization; reality confrontation; permissiveness; group cohesion, and the multidisciplinary team. • The principle guiding the care of clients in the community is that of the least restrictive alternative. • The therapeutic community residence is an environment that encourages the development of the client as a person in interaction with others, rather than as someone suffering from a health problem or disability. • The preferred contemporary setting for the provision of mental health care is the community. • The predominant form of service delivery in the community is case management, which has been found to be most effective for people with severe mental illnesses. • The principles of caring in the community are self-determination, normalisation, a focus on client strengths and the community as a resource.