Practitioners working in Australian mental health services are faced with the challenge of providing appropriate evidence-based interventions that lead to measurable improvement and good outcomes. Current government policy is committed to the development of strategic mental health research. One focus has been on under-researched practice areas, which include the development of psychosocial rehabilitation systems and models that facilitate recovery. To meet this challenge, an Australian rehabilitation service formed a collaborative partnership with a university. The purposes of the collaboration were to implement new forms of service delivery based on consumer need and evidence and to design research projects to evaluate components of the rehabilitation programme. This article examines the process of developing the collaboration and provides examples of how research projects have been used to inform practice and improve the effectiveness of service delivery. Challenges to the sustainability of this kind of collaboration are considered.