This study highlights lessons learnt from establishing a new recovery-focused inpatient rehabilitation unit in a typical regional city of New South Wales. We have learnt that the most important aspects are recruitment, retention and training of dedicated staff and a belief that recovery is possible. Strategies employed to meet the challenges of integrating a recovery-based practice into this type of setting may be transferable to other new services or existing services of a similar nature. We have provided a summary of standard outcome measures reflecting the performance of the unit for the first 2 years of functioning.