Jail diversion programs have proliferated across the United States as a means to decrease the incarceration of individuals with mental illnesses. These programs include pre-adjudication initiatives, such as Crisis Intervention Teams, as well as post-adjudication programs, such as mental health courts and specialized probationary services. Post-adjudication programs often operate at the point of sentencing, so their comportment with criminal justice norms is crucial. This article investigates whether and under what circumstances post-adjudication diversion for offenders with serious mental illnesses may cohere with principles of retributive justice. Key tenets of retributive theory are that punishments must not be inhumane and that their severity must be proportionate to an offender’s desert. Three retributive rationales could justify jail diversion for offenders with serious mental illnesses: reduced culpability, the avoidance of inhumane punishment, and the achievement of punishment of equal impact with similarly situated offenders. The article explores current proposals to effectuate these rationales, their manifestations in law, and how these considerations may impact decisions to divert individuals with serious mental illnesses from jail to punishment in the community.