Despite a rapidly growing population, continuing funding shortages, and threats to its national security, Israel has developed a comprehensive mental health care system, based on the psychiatric hospital. Services are provided through several networks, including government-financed and for-profit hospitals, government-financed mental health clinics in each of 23 service areas, and four health funds. Other networks provide care for specific groups such as soldiers, kibbutz members, orthodox Jews, and Israeli Arabs. The system's reliance on the hospital creates special problems, such as dependency and fragmentation of care, and a community mental health model adopted almost 20 years ago has yet to achieve the goal of shifting treatment to the community. However, Israel's mental health system is in a transition period. By drawing on its many strengths and learning from other countries' experience, Israel has the potential for developing a unique community-focused system.