Within the last decade, judicial pressure for quality institutional care has served to accelerate the deinstitutionalization process primarily because it is the most economical solution to the problem. Deinstitutionalization without adequate community services and integration, however, often results in impoverished, borderline ex-patients encountering the criminal justice system as a result of maladjustment. The emotionally unstable ex-patient with low intelligence, notably one suffering from poor socialization and education, who has been 'dumped' back into society with little supervision or treatment, portrays the mentally retarded or pseudoretarded person (functionally retarded because of emotional problems) most likely to come into contact with the criminal justice system as a victim or offender. When such persons are placed in jail and prison environments, their stress level is exacerbated. A diagnostic profile based upon accurate and current data provides an indication of the types of chemical agents likely to be needed to stabilize acute exacerbation of psychotic, behavioral, and organic conditions. Diagnostic and medical information is very helpful, especially when attempting to stabilize a mentally retarded client experiencing neuropsychiatric episodes. It also provides a format for appropriate treatment. The traditional therapies of chemotherapy and behavioral management are used primarily to manage retardates in custodial facilities. Such treatment is usually for the convenience of the staff rather than the benefit of the inmate. Currently, efforts are being made to use community and contractual mental health services more effectively within penal environments. Fifty references are provided.