As research into mental illness caused by HIV continues, facilities will be challenged to distinguish between mental illnesses resulting from HIV infection and those with other organic causes. The criteria for AIDS testing held by most institutions include clinical signs, high-risk patients, patients previously diagnosed as HIV-infected but needing confirmation, and harmful exposure within the facility. While voluntary testing is widespread, some facilities require mandatory screening of patients practicing high-risk behaviors, and only a few test routinely upon admission. More than 30 States have enacted new confidentiality laws to protect HIV test-related information; eight other States have strengthened the confidentiality clauses in existing statutes. The implications for mental health institutions of recent court decisions regarding the duty to protect identifiable victims of infection remain unclear. Although all States have authority to combat the transmission of dangerous communicable diseases, not all States have interpreted this power to cover AIDS transmission. Areas in patient management that require further study include educating mental illness patients about AIDS, using some forms of segregation, and coping with violent and sexual behavior in the facilities. Claims of liability against institutions may increase as knowledge of HIV infections and the relevant technologies evolve; the establishment of universal precautions should prevent many such claims. In order to provide services to patients, there needs to be a continuum of care, including outpatient, psychosocial, residential, rehabilitation, and support services. Finally, institutions need to provide ongoing staff training programs. 19 references.