This study compares hospital- (n=67) and community-based (n=55) mental health nurses in relation to their perceptions of the work environment and also their psychological health. Measures include: the General Health Questionnaire, the Maslach Burnout Inventory and the Work Environment Scale. The data, obtained from self-returned questionnaires, show that community nurses rated their work environments higher for the dimensions of Involvement, Supervisor Support, Autonomy, Innovation and Work Pressure. Hospital nurses saw their environments as being higher in (managerial) Control. There were no differences between the groups for the dimensions of Peer Cohesion, Task Orientation, Clarity or (physical) Comfort. Furthermore, there were no overall differences between the two groups in relation to psychological health, although the pattern of factors associated with emotional well-being differed. Finally, analyses of the Community data revealed that those nurses with ‘flexitime’ arrangements evaluated their work environments less positively and showed higher levels of psychological strain than did those working ‘fixed-time’ schedules. The findings suggest that the hospital and community environments make different demands on nursing staff, and that this should be considered when organizing nursing services if stress is to be avoided.