Seven large equivalent male Veterans Administration wards were used in a study linking treatment environment as perceived by patients and staff to treatment outcome as assessed by ward dropout, release, and community tenure rates. Results indicated that wards with high dropout rates were perceived by patients as being low in emphasis on practical orientation and order and organization and by staff as low in support, involvement, and program clarity, but high in anger and aggression and staff control, whereas wards with high release rates were perceived by patients as high in practical orientation and staff control and by staff as low in spontaneity. Wards which kept later readmitted patients out in the community longest were perceived to be high in staff control by both patients and staff.