Little is known about psychiatric illness and utilization of end-of-life care. We hypothesized that preexisting psychiatric illness would increase hospital utilization at end of life among patients with chronic medical illness due to increased severity of illness and care fragmentation. We reviewed electronic health records to identify decedents with one or more of eight chronic medical conditions based on International Classification of Diseases-9 codes. We used International Classification of Diseases-9 codes and prescription information to identify preexisting psychiatric illness. Regression models compared hospital utilization among patients with and without psychiatric illness. Path analyses examined the effect of severity of illness and care fragmentation. Eleven percent of 16,214 patients with medical illness had preexisting psychiatric illness, which was associated with increased risk of death in nursing homes (P = 0.002) and decreased risk of death in hospitals (P < 0.001). In the last 30 days of life, psychiatric illness was associated with reduced inpatient and intensive care unit utilization but increased emergency department utilization. Path analyses confirmed an association between psychiatric illness and increased hospital utilization mediated by severity of illness and care fragmentation, but a stronger direct effect of psychiatric illness decreasing hospitalizations. Our findings differ from the increased hospital utilization for patients with psychiatric illness in circumstances other than end-of-life care. Path analyses confirmed hypothesized associations between psychiatric illness and increased utilization mediated by severity of illness and care fragmentation but identified more powerful direct effects decreasing hospital use. Further investigation should examine whether this effect represents a disparity in access to preferred care.