Psychiatric community-based services are being developed in Malaysia currently to ensure more comprehensive mental health care to especially patients with severe mental illness. Assertive Community Treatment (ACT) as one of the earliest component of community-based services has been observed to be useful and able to provide favourable outcomes in this group of patients. Though the paradigm shift has gradually occurred among mental health practitioners and policy makers, challenges are mainly in the implementation process. This article will present the discussion and academic view on various aspects of ACT including the rationale, elements, clinical and psychosocial impacts on patients as well as the current challenges in the Malaysian context. Keywords: Psychiatric community-based services, Assertive community treatment (ACT), severe mental illness (SMI