This technical document is a framework for action. Its objective is to guide the psychiatric care deinstitutionalization process in the context of Latin America and the Caribbean. The essential purpose of deinstitutionalization is to limit the role of psychiatric hospitals by incorporating acute care hospital beds into general hospitals and replace those psychiatric facilities with community-supported housing solutions for people with severe mental illness. At the same time, there must be an efficient network of community-based mental health services. This involves the priority development of effective new community practices and services that protect the rights of people with mental illness. This publication summarizes the facilitators and barriers that will be encountered in the deinstitutionalization process and identifies useful and proven interventions in Latin American and Caribbean countries. Four areas of work are identified with the respective guidelines or suggestions for action, which should provide an operational guide for countries that are restructuring mental health services and moving toward the deinstitutionalization of psychiatric care.