To address the complex health care needs of patients with mental illness-who commonly have co-occurring medical conditions and substance use disorders-it is critically important for providers to use electronic health records (EHRs) for health information exchange (HIE) when patients are transferred from inpatient psychiatric units in acute care hospitals. Efficient and timely HIE is necessary to ensure that patients receive adequate and informed follow-up care. This study examined the percentage of inpatient psychiatric units that reported using EHRs for HIE at transfers of care and hospital characteristics associated with that use. We linked national data from the Inpatient Psychiatric Facility Quality Reporting Program of the Centers for Medicare and Medicaid Services, the American Hospital Association Annual Survey, and state mental health privacy laws. In 2016 the use of electronic HIE upon transfer from psychiatric units lagged behind the corresponding overall use rates from acute care hospitals (56.3 percent versus 88 percent), with wide variation across states. Hospital size and accountable care organization participation were associated with electronic HIE, but a state's having mental health privacy laws more stringent than the Health Insurance Portability and Accountability Act did not. Given these results, policy efforts to incentivize the use of electronic HIE in psychiatric settings should be strengthened.