The American Medical Association Council on Long Range Planning and Development has been publishing a series of reports that assess trends in the environment of medicine and their impact on physicians and health care provision. The Council believes each specialty in medicine will respond differently to changes in the health care arena. This report, developed in cooperation with the American Psychiatric Association, provides an overview and environmental analysis of the specialty of psychiatry. Socioeconomic data pertinent to psychiatry are reviewed first, followed by a review of scientific and clinical developments in the specialty. Next, the changing provision patterns of psychiatric care, the emerging patient populations served by psychiatrists, and recent developments in graduate medical education in psychiatry are reviewed. The Council also addresses changes in the financing of psychiatric care. In conclusion, the Council suggests implications of these and other environmental trends for psychiatry.