The pattern of mental health care in Greece is undergoing a major transformation. The Leros Projects I and II supported the development of 13 community hostels located throughout the Greek mainland. These hostels provide residential care to more than 100 former psychiatric inpatients, mainly from Leros asylum. The present study evaluates the impact of the resettlement process on the residents' perceived quality of life (QoL) together with an examination of the residents' psychiatric and behavioural functioning four years after the move from hospital. The target sample (n = 99) comprised of individuals who may be considered 'chronic' psychiatric patients with a long history of institutionalisation and many are socially deprived with few family ties. The residents' functioning profile indicates a range of different levels of abilities. The QoL findings show that the majority of residents (70%) perceived the movement from the traditional hospital regime to the community hostels as being a positive change and expressed their satisfaction (74%) with the new living situation. This study demonstrates that even the most dependent, chronic psychiatric patients in Greece can be maintained in community settings and are able to articulate generally reliable and valid responses concerning the impact of service changes.