With the closing of long-term psychiatric facilities, no alternative social institution has arisen to treat those persons whose chronic mental illness makes self-care impossible. This paper explores the typical paths to placement in a skilled nursing facility or nursing home and the author's experience in working with this population using the principles and techniques of interpersonal psychoanalysis. She presents several case examples and explicates both the analyst's and the patient's transference. The author discusses the difficulties inherent in creating an analytic space in such a setting and working outside of the usual psychoanalytic frame.