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Objective: The Pathways to Community Living Initiative (PCLI) aims to reform mental health care for people with severe and persistent mental illness (SPMI) and complex needs. This study reports independent evaluation findings on transitions from hospital and practice change in mental health services., Methods: Data for this mixed-methods evaluation were obtained from administrative collections and semi-structured interviews with PCLI program managers, teams and executive leads; aged care managers; and leaders in inpatient, community and older people's mental health services., Results: Between July 2015 and December 2020, 674 participants (67% of those eligible for the PCLI) were transitioned from hospital to community. Of those transitioned, 21 required subsequent long-stay admissions. The PCLI introduced resources, clearly defined processes, and state-wide networks to guide changes in practice which are becoming embedded in the operations and governance of mental health services across New South Wales., Conclusions: Severe and persistent mental illness and complex needs can be managed in community settings with highly individualised planning and care, supported by specialised clinical teams in partnership with mental health, aged care and disability services. Evaluation findings highlight the importance of continued investment in rehabilitation psychiatry., Competing Interests: DisclosureThe author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.