Background: The number of older adults with serious mental illness (SMI), including bipolar disorder, schizophrenia, and depressive disorders, is expected to increase. Yet, SMI treatment access and its association with adverse outcomes in this specific population are not well established. This study aims to quantify SMI pharmacological treatment initiation among older adults with SMI, analyze its geographic variation, and examine its association with preventable hospitalizations. Methods: Using 2006-2012 Medicare administrative and claims data, this retrospective cohort study identified fee-for-service beneficiaries newly-diagnosed with SMI. Pharmacological treatment initiation was defined as any prescription fill for medications indicated for the newly-diagnosed SMI in the 12 months after diagnosis, with no use in the 6 months before initiation. The crude and adjusted regional pharmacological treatment incidences were summarized at the hospital referral region level and examined with spatial clustering using local indicators of spatial autocorrelation (LISA). Preventable hospitalizations were measured by the count of hospital or emergency department admissions related to ambulatory care-sensitive conditions (e.g., diabetes, cardiovascular, respiratory disease) during the same follow-up period and compared between SMI treatment pharmacological initiators and nonusers. Generalized linear mixed models with random intercepts were conducted to generate all estimates, adjusting for beneficiary demographics, comorbidities, health services utilization, regional physician supply, and spatial clustering of regional SMI pharmacological treatment incidences. Results: Of the 38,607 beneficiaries aged 65 and older identified with newly-diagnosed SMI in 2008-2012, 64.8% initiated pharmacological treatment after diagnosis. The sample was predominantly female (74.0%) and white (85.1%), with a mean age of 78.5 years. LISA results visualized highly-localized regional pharmacological treatment incidences, with hot spots clustering in the Midwest and upper Pacific West and cold spots in the West South Central and lower New England regions after adjustment. Compared with nonusers, SMI pharmacological treatment initiators showed a 12% reduced risk for preventable hospitalizations (RtR 0.88, 95% CI 0.84-0.93). Conclusions: Findings suggest the majority of older adults with SMI receive pharmacological treatment after diagnosis. Clustering of regional SMI pharmacological treatment incidences implies locally-shared physician practice styles in treating SMI. Timely SMI pharmacological treatment initiation plays an important role in managing risks for preventable adverse outcomes.