The study aimed to develop a mental illness needs index to help local managers, district purchasers and national policy makers in allocating resources. Formulae were developed by regression analysis using 1991 census data to predict the period prevalence of acute psychiatric admission from electoral wards. Census variables used were chosen on the basis of an established association with mental illness rates. Data from one English Health Service region were analysed for patterns common to wards at hospital catchment area level and patterns common to district health authorities at regional level. The North East Thames region was chosen as the setting for the study, with 7096 patients being admitted during 1991. In most, but not all, catchment areas reasonable prediction of the pattern of admission prevalence was possible using the variables chosen. However, different population characteristics predicted admission prevalence in rural and urban areas. Prediction methods based on one or two variables are thus unlikely to work in both settings. A Mental Illness Needs Index (MINI) based on social isolation, poverty, unemployment, permanent sickness and temporary and insecure housing predicted differences in admission prevalence between wards at catchment area level better than Jarman's Underprivileged Area (UPA) score [1] and between districts at regional level better than the UPA score and comparably to the York Psychiatric Index [2] (adjusted r2 at regional level (MINI 0.82, UPA 0.53, York index 0.70). District admission prevalence rates vary by a factor of three between rural and inner city areas; this difference may not fully reflect the variation in the cost of providing care. It did not prove possible to incorporate factors related to bed availability in the models used; reasons for this are discussed. Data covering other aspects of mental health care in addition to hospital admission are needed for more satisfactory modelling.