Background: The purpose of this study was to evaluate the quality of life consequences arising from the resettlement of adults with challenging behaviour severe enough to be deemed to require continuing healthcare from a traditional learning disability hospital to new purpose-built bungalows. The new accommodation was provided by a specialist NHS trust through special project arrangements designed to ensure that the provision of homelike accommodation in the community was coupled with "state of the art" staff training. Methods: There were 19 participants. Baseline data were collected on their adaptive and challenging behaviour and psychiatric status. Data on a variety of quality of care and lifestyle indicators were collected when the entire sample was in hospital ("T[subscript 1"]), when a minority had moved to the community, but the majority remained in hospital ("T[subscript 2]"), when the majority had moved to the community but a minority remained in hospital ("T[subscript 3]") and at follow-up ("T[subscript 4]"), when all lived in the community. Results: There were almost no areas of significant deterioration in quality of care or lifestyle outcome arising from moving to the community. The community provision was more homelike and associated with some improvement in working methods and staff contact received by participants, increased family contact, greater participant involvement in household activity and constructive activity generally and reduction in staff-reported challenging behaviour. Increases in the range and frequency of social and community activities over time were found but such increase also occurred while people remained in the hospital. Conclusions: This evaluation has shown that the quality of care and lifestyle outcomes associated with new NHS community settings for adults with learning disabilities and severe challenging behaviour assessed as requiring continuing healthcare were generally equivalent or superior to previous hospital levels. In this, findings were similar to other more general deinstitutionalisation studies. Certain improvement over time was found within the follow-up period studied. Further follow-up may be relevant as developing the desired working culture among staff from an institutional background may take longer than was given within the length of this study. (Contains 11 tables and 1 figure.)