Background There is controversy as to whether compulsory community treatment for psychiatric patients reduces hospital admission rates. Aims To examine whether community treatment orders (CTOs) reduce admission rates, using a two-stage design of matching and multivariate analyses to take into account socio-demographic factors, clinical factors, case complexity and previous psychiatric and forensic history. Method Survival analysis of CTO cases and controls from three linked Western Australian databases of health service use, involuntary treatment and forensic history. We used two control groups: one matched on demographic characteristics, diagnosis, past psychiatric history and treatment setting, and consecutive controls matched on date of discharge from in-patientcare. Results We matched 265 CTO cases with 265 matched controls and 224 consecutive controls (total n=754). The CTO group had a significantly higher readmission rate: 72% v. 65% and 59% for the matched and consecutive controls (log-rank {chi}2=4.7, P=0.03). CTO placement, aboriginal ethnicity, younger age, personality disorder and previous health service use were associated with increased admission rates. Conclusions Community treatment orders alone do not reduce admissions.