BACKGROUND: People living in group situations or with dementia are more vulnerable to infection with severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Older people and those with multimorbidity have higher mortality if they become infected than the general population. However, no systematic study exists of COVID-19-related outcomes in older inpatients in psychiatric units, who comprise people from these high-risk groups. We aimed to describe the period prevalence, demographics, symptoms (and asymptomatic cases), management, and survival outcomes of COVID-19 in the older inpatient psychiatric population and people with young-onset dementia in five National Health Service Trusts in London, UK, from March 1 to April 30, 2020. METHODS: In this retrospective observational study, we collected demographic data, mental health diagnoses, clinical diagnosis of COVID-19, symptoms, management, and COVID-19-related outcome data of inpatients aged 65 years or older or with dementia who were already inpatients or admitted as inpatients to five London mental health Trusts between March 1 and April 30, 2020, and information about available COVID-19-related resources (ie, testing and personal protective equipment). Patients were determined to have COVID-19 if they had a positive SARS-CoV-2 PCR test, or had relevant symptoms indicative of COVID-19, as determined by their treating physician. We calculated period prevalence of COVID-19 and analysed patients' characteristics, treatments, and outcomes. FINDINGS: Of 344 inpatients, 131 (38%) were diagnosed with COVID-19 during the study period (period prevalence 38% [95% CI 33-43]). The mean age of patients who had COVID-19 was 75.3 years (SD 8.2); 68 (52%) were women and 47 (36%) from ethnic minority groups. 16 (12%) of 131 patients were asymptomatic and 121 (92%) had one or more disease-related comorbidity. 108 (82%) patients were compulsorily detained. 74 (56%) patients had dementia, of whom 13 (18%) had young-onset dementia. On average, sites received COVID-19 testing kits 4.5 days after the first clinical COVID-19 presentation. 19 (15%) patients diagnosed with COVID-19 died during the study period, and their deaths were determined to be COVID-19 related. INTERPRETATION: Patients in psychiatric inpatient settings who were admitted without known SARS-CoV-2 infection had a high risk of infection with SARS-CoV-2 compared with those in the community and had a higher proportion of deaths from COVID-19 than in the community. Implementation of the long-standing policy of parity of esteem for mental health and planning for future COVID-19 waves in psychiatric hospitals is urgent. FUNDING: None.