Harm reduction is a conceptual framework and set of practices that focus on the minimization of the physical, social, and legal harms substance users do to themselves and to society as a whole. Its application to community mental health settings is relatively new, and can create controversies and ethical dilemmas if not properly designed, implemented, and evaluated. Building on the harm reduction literature, the community mental health literature, and the authors' experiences with a community mental health program that uses a harm reduction approach, the authors offer five guidelines for its successful implementation. The authors conclude that when properly integrated with other recovery-based services, and when appropriately applied to the individual client's stage of change, harm reduction can effectively be used, and should be used, in community mental health settings with clients with co-occurring substance use and psychiatric disorders.