Patients with serious mental illness (SMI), particularly those with other chronic illnesses, may be vulnerable to unplanned hospital readmission. The authors hypothesized that SMI would be associated with increased 30-day hospital readmission in a cohort of adult patients with comorbid diabetes admitted to a tertiary care facility from 2005 to 2009. SMI was defined by International Classification of Diseases, Ninth Revision, discharge diagnosis codes for schizophrenia, schizoaffective, bipolar, manic, or major depressive disorders, or other psychosis. The primary outcome was 30-day readmission to the index hospital. Among 26 878 eligible admissions, the prevalence of SMI was 6% and the incidence of 30-day hospital admission was 16%. Among patients aged <35 years, SMI was significantly associated with decreased odds of 30-day hospital readmission (odds ratio [OR] = 0.39; 95% confidence interval [CI] = 0.17, 0.91). However, among patients ≥35 years, SMI was not significantly associated with 30-day hospital readmission (OR = 1.11; 95% CI = 0.86, 1.42). SMI may not be associated with increased odds of 30-day hospital readmission in this population.