The author reviews the history of consultation-liaison psychiatry from its roots in the 1751 charter of the Pennsylvania Hospital in Philadelphia. The field has evolved through three distinct phases and has currently entered a fourth stage, called the consolidation phase, which is characterized by shrinkage of programs, marked reduction in liaison activities, and anxiety about its validity and future. While the survival of consultation-liaison psychiatry is threatened by inadequate financial resources, the author believes that the increasing demand for C-L psychiatrists will eventually mandate a greater investment in the special expertise they offer.