In this report we have discussed a part-time hospitalization program in a small private mental hospital. Administratively, the Day or Night Plan, used by a small and selected number of psychotic and neurotic patients, did not pose any special problem. The plan afforded a significant reduction in the cost of hospitalization. It augmented, in a constructive manner, the services of the occupational therapy department and in many instances functioned as a program for vocational rehabilitation. The plan proved effective in reducing the isolation from community activities and interests for patients on this program as well as for those more permanently confined. In time, patients considered being on this plan a privilege, a token of improvement, and a terminal phase in hospitalization. We believe that this program has offered patients an essentially salutary experience.We soon recognized that even so simple a manipulation of the patient's time brought forth complicated responses that carried strong dynamic implications. In each instance, the therapist and patient had to work through problems that involved anxieties and conflicts over the anticipated discharge from a completely protective environment, ambivalent feelings about termination or change in the doctor-patient relationship, conscious and unconscious motivations for work, and scrutiny of behavior in new situations and new interpersonal relationships. In many instances, the patients did their most constructive therapeutic work while on the Day Plan.The multiple factors involved demand careful evaluation and judgment in selecting patients suitable for this program. In our series of 19 patients, the problems and situations that obtained for selecting patients were essentially as follows:(1) Problems of continuation of therapy at a time of conflict between complete dependence on the hospital and impulsive negation for any further need of treatment (5 patients).(2) Problems of accepting patient's seemingly rational demands and conscious desire for work (3 patients).(3) The needs for partial and time-limited rehabilitation by employment during early phases of recovery from acute psychotic episodes (3 patients).(4) Short-time evaluation of patient's tolerance to stress in a nonhospital situation prior to discharge (5 patients).(5) Gradual adaptation of chronic, psychotic patients to home environments (3 patients).The series of 19 patients on the Day or Night Plan is too small and too varied to allow us to draw specific conclusions of a statistical nature.The report uses illustrations with case histories and comments on the more common problems observed, with particular elaboration on the significance of the plan as a terminal phase of hospital treatment.