Psychiatric deinstitutionalization (PDI) processes aim to transform long-term psychiatric care by closing or reducing psychiatric hospitals, reallocating beds, and establishing comprehensive community-based services for individuals with severe and persistent mental health difficulties. This scoping review explores the extensive literature on PDI, spanning decades, regions, socio-political contexts, and disciplines, to identify barriers and facilitators of PDI implementation, providing researchers and policymakers with a categorization of these factors. To identify barriers and facilitators, three electronic databases (Medline, CINAHL, and Sociological Abstracts) were searched, yielding 2,250 references. After screening and reviewing, 52 studies were included in the final analysis. Thematic synthesis was utilized to categorize the identified factors, responding to the review question. The analysis revealed that barriers to PDI include inadequate planning, funding, and leadership, limited knowledge, competing interests, insufficient community-based alternatives, and resistance from the workforce, community, and family/caregivers. In contrast, facilitators encompass careful planning, financing and coordination, available research and evidence, strong and sustained advocacy, comprehensive community services, and a well-trained workforce engaged in the process. Exogenous factors, such as conflict and humanitarian disasters, can also play a role in PDI processes. Implementing PDI requires a multifaceted strategy, strong leadership, diverse stakeholder participation, and long-term political and financial support. Understanding local needs and forces is crucial, and studying PDI necessitates methodological flexibility and sensitivity to contextual variation. At the same time, based on the development of the review itself, we identify four limitations in the literature, concerning “time,” “location,” “focus,” and “voice.” We call for a renewed research and advocacy agenda around this neglected aspect of contemporary global mental health policy is needed.