The objective of this study is to measure HIV/AIDS knowledge among patients with mental illness in Brazil and to examine individual and treatment setting predictors of knowledge. We conducted a cross-sectional national multicenter study among 2,475 patients in 26 randomly selected mental health institutions throughout Brazil. We used Item Response Theory to standardize knowledge scores and multilevel multiple linear regression to determine the effect of individual and treatment setting characteristics on standardized knowledge score. Schizophrenia was the main diagnosis (48%) of participants. Mean knowledge score was 6.78 (range 1-10). Treatment setting characteristics were not associated with knowledge scores. Higher HIV/AIDS knowledge scores were significantly associated with a history of sexually transmitted disease (STD), previous HIV testing and consistent condom use; lower HIV/AIDS knowledge scores were significantly associated with specific sociodemographic, psychiatric, and HIV risk-perception factors. Psychiatric patients in Brazil lag behind the general population with knowledge scores comparable to those of nearly a decade ago. The mental health system in Brazil and elsewhere must consider strategies beyond dispensing information, for preventing HIV/AIDS transmission in the psychiatric population.