Demonstration studies of community treatment as an alternative to hospitalization have reported high degrees of satisfaction by family carers. We aimed to determine the extent of carer preference for hospital versus community treatment for acute mental illness in a routine setting where carers had experienced both service types.Patients who had contact with both a hospital inpatient service and a Crisis Assessment and Treatment (CAT) team within the previous 5 years were identified. Seventy-seven family carers of these patients completed a questionnaire which identified their preference for services, and psychological and demographic variables likely to be predictive of their choice.Only half the carers preferred a CAT service to treat their relative in the event of a future relapse. Psychological variables were better predictors of choice than were demographic variables.The proportion of caregivers who prefer community treatment for acute psychosis may be smaller than previously thought. The lower carer satisfaction found here may be associated with the short-term interventions of Victoria's CAT teams, the severity of acute relapses and the duration of the patient's mental health problem.