Background: A text messaging service (short message service [SMS]) has the potential to target large groups of people with long-term illnesses such as serious mental disorders, who may have difficulty with treatment adherence. Robust research on the impact of mobile technology interventions for these patients remains scarce. Objective: The main objective of our study was to investigate the impact of individually tailored short text messages on the rate of psychiatric hospital readmissions, health care service use, and clinical outcomes. In addition, we analyzed treatment costs. Methods: Between September 2011 and November 2012, we randomly assigned 1139 people to a tailored text message intervention (n=569) or usual care (n=570). Participants received semiautomated text messages for up to 12 months or usual care. The primary outcome, based on routinely collected health register data, was patient readmission into a psychiatric hospital during a 12-month follow-up period. Secondary outcomes were related to other service use, coercion, medication, adverse events, satisfaction, social functioning, quality of life, and economic factors (cost analysis). Results: There was 98.24% (1119/1139) follow-up at 12 months. Tailored mobile telephone text messages did not reduce the rate of hospital admissions (242/563, 43.0% of the SMS group vs 216/556, 38.8% of the control group; relative risk 1.11; 95% CI 0.92-1.33; P=.28), time between hospitalizations (mean difference 7.0 days 95% CI –8.0 to 24.0; P=.37), time spent in a psychiatric hospital during the year (mean difference 2.0 days 95% CI –2.0 to 7.0; P=.35), or other service outcomes. People who received text messages were less disabled, based on Global Assessment Scale scores at the time of their readmission, than those who did not receive text messages (odds ratio 0.68; 95% CI 0.47-0.97; P=.04). The costs of treatment were higher for people in the SMS group than in the control group (mean €10,103 vs €9210, respectively, P