The problem of mentally ill offenders is discussed in this report. Mentally ill offenders are described as generally not violent, with their behavior resulting in charges such as shoplifting, vagrancy, and trespassing. Factors increasing the number of mentally ill offenders are discussed, including the inability of families and communities to handle the deinstitutionalized mentally ill population. Problems the mentally ill face in incarceration without mental health care are also presented. Seven guidelines for improving the status of the mentally ill offender are presented, including increasing the number of psychologists and psychiatrists working in prisons and studying creative funding measures. Specific state laws impacting the mentally ill offender are presented. Five local exemplary programs are summarized. In a discussion of future trends and implications, it is noted that jails are bearing the burden of deinstitutionalization. Suggestions for system improvement such as conservatorship and mental health/law enforcement personnel linkages are made. A case study of Michigan is presented. Sixteen references are listed. (ABL)