This paper uses the framework of the applied social science needs/rights antinomy to describe the efforts of Israel's mental health system in transforming a hospital-based orientation to services for individuals with a severe mental illness, to a community-based recovery orientation. On the one hand, a rationale for the provision of services to individuals with a severe mental illness that stresses these individuals' needs can justify the allocation of society's limited resources by referring to an objectively determinable set of psychiatric needs. However, this rationale may establish an inherent asymmetry between the adequate help provider and deficient help user. On the other hand, a rationale for providing psychiatric rehabilitation services that stresses the fundamental symmetry between the help provider and the help user is empowering, thus consistent with the recovery approach. However, this rationale does not provide a mechanism for negotiating the vague boundary between mental health and mental illness. Israel's mental health system has operationalized a policy that emphasizes rights as well as needs by legislating for a comprehensive set of rehabilitation services that individuals meeting the eligibility criteria may receive. This paper discusses this approach's achievements, challenges and implications for future policy, research, and practice.