Therapeutic community is a participative, group-based approach to long-term mental illness, personality disorders and drug addiction. The approach was usually residential, with the clients and therapists living together, but increasingly residential units have been superseded by day units. It is based on milieu therapy principles, and includes group psychotherapy as well as practical activities.

Therapeutic communities have gained some reputation for success in rehabilitation and patient satisfaction in Britain and abroad. In Britain, 'democratic analytic' therapeutic communities have tended to specialise in the treatment of moderate to severe personality disorders and complex emotional and interpersonal problems. The evolution of therapeutic communities in the United States has followed a different path with hierarchically arranged communities (or concept houses) specialising in the treatment of drug and alcohol dependence.