St. Wulstan's Hospital, Malvern, opened in November, 1961. It is the first hospital in Great Britain to be given the specific function of rehabilitating selected chronic psychiatric patients from other hospitals. The original plans for its use were made by the Mental Health Services Advisory Panel of the Birmingham Regional Hospital Board. In 1959 this panel was confronted with overcrowding in the Board's twelve existing mental hospitals; it was offered the use of a tuberculosis sanatorium that would shortly be closing for lack of patients, and it was impressed by the results reported from other hospitals of giving chronic patients industrial work to do. Accordingly the panel formulated plans to reopen the former sanatorium as a psychiatric rehabilitation hospital. The execution and development of these plans are described in this paper.