Background There is a strong correlation between severe mental illness and criminality, but little is known about how these two problem areas together may affect health outcomes. Aim The objective of this paper is to compare survival rates of male psychiatric inpatients over a 25‐year period who have and have not been subject to imprisonment, allowing for nature of psychiatric morbidity. Methods A nationwide cohort of men who had ever been psychiatric inpatients was identified from Icelandic data‐registers, and their diagnoses after first discharge, cumulative incidence of imprisonment, and mortality established from records. Using a nested case‐control design, survival differences were determined between those ever imprisoned and those never imprisoned. Results Between January 1983 and March 2008, 7665 men were admitted to psychiatric wards in Iceland, of whom 812 (10.6%) had served a prison sentence during that time. Cumulative incidence of imprisonment was highest in the youngest age group (21%). Substance use and personality disorders were more common amongst those imprisoned. All‐cause mortality, adjusted for diagnosis, age, and year of admission, was twice as high amongst those imprisoned as those not imprisoned (Hazard ratio = 2.0, 95% CI 1.5–2.6, p < 0.001). Clinical implications Our findings indicate that psychiatric inpatients with criminal records should receive special attention with respect to all aspects of their health, not only within psychiatric services but also through more collaboration between the healthcare and judicial systems. Copyright © 2015 John Wiley & Sons, Ltd.