Among men who kill, one in three was diagnosed with a mental disorder.
Mental health problems across both groups included depression and personality disorders, but most common was schizophrenia, which was diagnosed for 38 of the 435 killers. Men with schizophrenia were found to be eight times more likely to kill, and women with schizophrenia 29 times more likely to kill, than non-sufferers.
The findings come as the former clinical director of the Victorian Institute of Forensic Medicine, Paul Mullen, said Victoria had gone too far in de-institutionalising mental health.
Now a Monash University professor emeritus of forensic psychiatry, he said the push for ever shorter hospital stays meant many people with serious disorders such as schizophrenia were not adequately treated.
''We have a situation in Victoria where we don't have even a minimum supply of inpatient care for seriously mentally ill people. As a result you have a major breakdown in the treatment of people with severe mental illness,'' said Professor Mullen.
The study of Victorian killers points out that the ''vast majority'' of people suffering schizophrenia are not a risk to others. But researchers were surprised to discover that schizophrenia sufferers were more likely than other killers to plan their attack, and that they were more likely to be motivated by revenge.
Clinicians treating people with schizophrenia should be alert for signs of resentment, or of having been wronged, particularly by family members, the study suggested.
''Juries think that mentally disturbed killers are frenzied, but what the research shows is they are more likely than the average person to have planned that murder, even though the rationale for planning it was based on the mental illness - believing their mother is a witch or someone is trying to poison them,'' said Professor Jim Ogloff, Forensicare's director of psychological services.
''It isn't unusual for schizophrenics to be paranoid, but their thoughts about family members need to be monitored closely, given it can lead to revenge motive.''
Professor Ogloff said the risks of people with schizophrenia offending were increased sharply with drug or alcohol abuse.
The unpublished study of homicide and mental illness is part of a doctoral degree by an experienced Victoria Police officer, Detective Senior Sergeant Debra Bennett. It covers 380 men and 55 women who committed homicides in Victoria from 1997 to 2005.
Professor Mullen said people with schizophrenia were once hospitalised for up to six weeks at the first onset of the illness, and up to three weeks for subsequent admissions. In Victoria the average mental-health bed stay is now seven to 10 days.
''Very rarely can you do a basic job in less than three weeks,'' Professor Mullen said.
Victoria has fewer inpatient beds than the national average: 23 beds per 100,000 population compared to 30.7 beds per 100,000.
Minister for Mental Health Lisa Neville conceded that ''there is more to be done'', but said the Government had invested heavily in treating mental illness, including increasing the number of beds at Thomas Embling Hospital in 2007, and creating almost 100 beds for sub-acute care.
By mid-2010, a further 53 public hospital beds will have opened in Melbourne and Geelong.
According to Ms Neville, recurrent mental health spending has more than doubled since 1999, resulting in treatment for 9000 more patients this year.
''We are increasing capacity across all mental-health services including inpatient care and community-based care, but a major focus [is] … on early intervention,'' she said.
''We are providing earlier support for children and young people, and for adults before their problems become acute.''
In the past decade the Health Department has overseen a shift to community-based treatment, whereby people refusing treatment can be made subject to a community treatment order.