The authors conducted a quantitative examination of parallels between milieu and therapy group dynamics on a short-term inpatient unit. The Ward Atmosphere Scale was used to assess the milieu, and the Group Climate Questionnaire-S to measure processes in key groups. Assessments were made by patients and staff once each week for 10 months. The authors found clear parallels between ward and therapy group processes. The parallels reflected the impact of patterns utilization of the unit, its treatment philosophy, and the emotional dynamics of its constituents. Examination of these associations also revealed limitations of the treatment setting, clarified the potential impact of particular staff interventions, and demonstrated biases in the rating methods. Study of parallel process on the psychiatric unit is a rich source of information on the nature of inpatient treatment.