Short-Term Acute Residential Treatment (START) homes, located in the community and operating in noninstitutional atmospheres, seek to reduce rehospitalization. This report investigates whether these homes reduced rates and duration of subsequent inpatient stays in psychiatric hospitals. For 107 patients treated in START homes after psychiatric hospitalization, we compared the number and duration of psychiatric hospitalizations before and after their START stay. We found that, compared with the year before the START stay, in the year after the START stay, patients had fewer episodes of rehospitalization (1.60 [SD = 1.23] vs. 0.63 [SD = 1.05], t[106] = 7.097, p < 0.001) and a briefer accumulative duration of inpatient stays (41.60 days [SD = 49.4] vs. 26.60 days [SD = 53.25], t[106] = -2.32, p < 0.03). This suggests that START homes can reduce rehospitalization rates and should be considered a valid alternative to psychiatric hospitalization.