IMPORTANCE: Home treatment (HT) has been associated with fewer inpatient treatment (IT) readmission days but lacks evidence on reducing combined psychiatric hospital service use (IT, HT, day clinic). OBJECTIVE: To assess the association of intensive home treatment (IHT) compared with IT regarding readmission rate, social outcomes, and clinical outcomes. DESIGN, SETTING, AND PARTICIPANTS: This quasi-experimental, nonrandomized trial was conducted from 2020 to 2022 in 10 psychiatric hospitals in Germany. Propensity score (PS) matching was used to compare both treatment models at the 12-month follow-up using standardized instruments and routine hospital data. All patients were screened until the target sample size was reached, based on these criteria: stable residence with privacy for sessions, no child welfare risk, primary diagnosis within International Statistical Classification of Diseases and Related Health Problems, Tenth Revision codes F0X to F6X, residence in the catchment area, no commitment order, no acute suicidality or severe aggression requiring hospitalization, capacity to consent, not participating in other interventional studies, sufficient German language skills, no substantial cognitive deficits or intellectual impairment, and no more than 7 days in IHT or IT before recruitment. Statistical analysis was performed from February to November 2023. INTERVENTION: IHT provided daily acute psychiatric treatment at home, while IT was psychiatric inpatient treatment as usual. The mean treatment duration of the index treatment was 37.2 days for IHT and 28.2 days for IT. MAIN OUTCOMES AND MEASURES: The inpatient readmission rate was the primary outcome. Secondary outcomes were combined readmission rate, total inpatient days, job integration, quality of life, psychosocial functioning, symptom severity, and recovery. RESULTS: Of 1396 individuals, 200 patients receiving IHT and 200 patients receiving IT were included (264 female [65%]; mean [SD] age, 45.45 [15.83] years [range, 18-88 years]). Baseline sociodemographic and psychometric characteristics did not differ significantly between the groups. At 12-month follow-up, patients in the IHT group had lower inpatient readmission rate (IHT vs IT: 31.12% vs 49.74% IT; mean difference, 18% [95% CI, 9%-28%; P < .001), combined readmission rate (mean difference, 13% [95% CI, 4%-24%; P < .001), and fewer inpatient days (mean difference, 6.82 days; P < .001) than the IT group. CONCLUSIONS AND RELEVANCE: This nonrandomized clinical trial found that patients receiving IHT had a lower likelihood of utilizing hospital-based psychiatric services and spent fewer inpatient days, suggesting that IHT is a viable alternative to IT. TRIAL REGISTRATION: ClinicalTrials.gov Identifier: NCT04745507.