The State of California Legislature passed SB 1485 in 1998, which created the Mentally Ill Offender Crime Reduction Grant Program (MIOCRG). The MIOCRG Program directed the Board of Corrections to award $104 million in grant monies to support the implementation and evaluation of multi-agency demonstration projects designed to reduce recidivism among mentally ill offenders. The demonstration projects offer enhanced services addressing the extensive post-custody needs of mentally ill offenders, as identified by counties. Chapter 1 of this report offers an overview of the MIOCRG Program, which involved a collaborative planning process among local law enforcement, corrections, mental health agencies, and other community-based service providers. The amount of grant awards per county is presented for the MIOCRG Program I and II. Grant awards were contingent upon the development of a local plan that described the county's existing response to mentally ill offenders, identified service gaps, and outlined strategies for a continuum of graduate responses for the mentally ill offender population. Chapter 2 describes the strategies, challenges, and early successes of the demonstration projects. Most strategies involved a multi-disciplinary team of service providers that coupled intensive case management with intensive probation supervision. Common challenges included problems of project implementation, such as the recruitment and training of staff and the enrollment of clients. The lack of affordable housing is described as one of the major challenges plaguing the day-to-day operations of the projects. Chapter 3 presents the statewide evaluation of the projects, which was undertaken to determine the success of the projects in reducing recidivism among this population of offenders when compared to treatment-as-usual for the group. The project evaluations are promising; the enhanced treatment groups had less involvement with the criminal justice system compared to the treatment-as-usual group. Moreover, clients in the enhanced treatment group demonstrated more economic self-reliance than the treatment-as-usual group. This statewide assessment is anticipated to enhance understanding about the best interventions for mentally ill offenders. Tables, appendix