The policy of deinstitutionalizing mentally ill persons in most States without providing adequate mental health and social services for them in the community has left them to try and function in the community without appropriate supervision and assistance. Their behaviors in public cause frequent contact with the police and the criminal justice system, and many are placed in jail, absent the ability or willingness of community mental health agencies to service them. Jails are ill-equipped to provide the mental health services required, and mental conditions often deteriorate during incarceration. This report reviews States' legislative and programmatic responses to this problem in recent years. Legislation pertains to involuntary commitment to mental health facilities, treatment, and the rights of mentally ill offenders. Some exemplary local programs are described, and a Michigan case study portrays an efficient and effective system for serving the mentally ill in both the community and jail. 14 references.