As veterans age, chronic physical and psychiatric conditions increasingly challenge the Veterans Health Administration. We examine influences of age and diagnosis on health care utilization, within the context of the 1995 deinstitutionalization policy of the Veterans Health Administration. Veterans were hospitalized repeatedly over 5 years with diagnoses of schizophrenia, bipolar disorder, depression, or alcohol dependence (N = 7,719). Inpatient days decreased 14% from baseline while outpatient (OP) visits increased 63%, consistent with deinstitutionalization. In adjusted models, OP utilization greatly increased with age, but psychiatric visits-notably alcohol treatment--dropped sharply. Emergency visits rose after 1997, particularly for ethnic minorities. Individuals ages 35-49 and 50-64 years were the greatest consumers of OP care; these large, aging cohorts will continue to require additional services, taxing a burdened system. Utilization patterns evolve across the life course, requiring foresight to address changing demographic demands. Careful attention to mental health utilization patterns may help policy makers and providers understand psychiatric needs in older patients.