OBJECTIVE: People with multiple and persistent mental and physical health problems have high rates of transition failures when transferring from a hospital level of care to home. The transitional care model (TCM) is evidence-based and demonstrated to improve posthospital outcomes for elderly with physical health conditions, but it has not been studied in the population with serious mental illness. METHOD: Using a randomized controlled design, 40 inpatients from two general hospital psychiatric units were recruited and randomly assigned to an intervention group (n = 20) that received the TCM intervention that was delivered by a psychiatric nurse practitioner for 90 days posthospitalization, or a control group (n = 20) that received usual care. Outcomes were as follows: service utilization, health-related quality of life, and continuity of care. RESULTS: The intervention group showed higher medical and psychiatric rehospitalization than the control group (p = .054). Emergency room use was lower for intervention group but not statistically significant. Continuity of care with primary care appointments were significantly higher for the intervention group (p = .023). The intervention group’s general health improved but was not statistically significant compared with controls. CONCLUSIONS: A transitional care intervention is recommended; however, the model needs to be modified from a single nurse to a multidisciplinary team with expertise from a psychiatric nurse practitioner, a social worker, and a peer support specialist. A team approach can best manage the complex physical/mental health conditions and complicated social needs of the population with serious mental illness.