In the spirit of Adolf Mayer's medico-biological approach to the understanding of mental illnesses the article describes the advantages that neuropsychiatric approach brings to the diagnostic evaluation and treatment of psychiatric patients in a state hospital. Our review discusses the neuropsychiatric approach to the evaluation of state hospital patients with mild, moderate, and severe cognitive disturbances showing the role of neuropsychological testing, electroencephalography (EEG), and brain imaging in the neuropsychiatric assessment of primary and secondary mental illnesses. Neuropsychiatric evaluation helps to assess the peculiarities of movement disorder as a of side effects of regular psychiatric medications, e.g. the differences in diagnostic signs and treatment implication between Parkinson's disease and extrapyramidal syndrome (EPS) as a side effect of neuroleptics as well as the development of abnormal reflexes as a sign of tardive dyskinesia (TD) not directly related to the lesion of upper motor neuron. The article also discusses the development of hypokinetic delirium in the course of treatment of psychiatric patients not only as a side effect of neuroleptics but also of anticonvulsants, increasingly used as the mood stabilizers in modern psychiatry. Since aggressive behavior of psychiatric patients represents one of the major criteria for admission and often long term treatment in a state hospital, special consideration is given to the role of brain paroxysmal activity in the development of aggressive behavior, especially rage attacks, one of the main manifestations of aggressive behavior in a state hospital patients. Correspondingly, the use of anticonvulsants in the treatment of rage attacks is discussed. This article may serve as a model for the use of neuropsychiatric service in improvement of diagnostic evaluation and treatment of psychiatric patients in a state hospital.