OBJECTIVE: The aim of this study was to determine the prevalence of alcohol or non-alcohol substance use dual diagnosis among inpatients with severe mental illness in a psychiatric institution in Malaysia. In addition, this study aimed to determine adverse outcomes between dual diagnosis versus single diagnosis. Methods: This was a cross-sectional study conducted in the inpatient ward using the Mini-International Neuropsychiatric Interview (MINI) to establish the diagnosis of severe mental illness and to screen for alcohol or non-alcohol substance use disorder comorbidity. Outcomes and severity of different domains among severe mental illness patients were assessed using the Addiction Severity Index (ASI). Results: Out of 152 patients who participated in this study, 51.3% (n = 78) had comorbid alcohol use disorder, and 29.6% (n = 45) had non-alcohol substance use disorder. Males with Kadazan ethnicity with severe mental illness and alcohol use disorder had a higher risk of having comorbid non-alcohol substance use disorder. Similarly, male Kadazan patients with severe mental illness and non-alcohol substance use disorder had a higher risk of having a comorbid alcohol use disorder. Dual diagnosis patients with alcohol and non-alcohol substance use disorder had higher rates of hospitalizations (p < .001 and p = .001). Family and social relationships were affected among the alcohol use disorder group as shown by the higher composite score for family status (FCOMP; p < .001). This group also showed more severe psychiatric status, as the composite score for psychiatric status (PCOMP) was high (p = .004). Suicidality was higher among patients with alcohol use disorder and severe mental illness (p < .001). Conclusions: The prevalence of severe mental illness dual diagnosis was high in this study with poorer outcomes, higher rates of admissions, and risk of suicidality. This highlights the importance of provisions for a more holistic treatment approach among patients with dual diagnosis.