There is little empirical literature on observation as a psychiatric nursing procedure to prevent patients from harming themselves or others. National guidelines for this practice do not exist, with a consequence that local policies might be variable in content and quality. This paper reports a national survey of observation policies and usage based upon a stratified random sample of 27 psychiatric inpatient service providers in England and Wales. Extreme variation in terminology and practice was encountered. The terminological confusion is likely to reduce nurses' clarity about their responsibilities and increase risks to patients. Further variation exists from place to place as to whether, and to what extent, student nurses and family members should be entrusted with the responsibility to observe patients. More than one in 10 services of the sample still have no written observation policy, and four in 10 have no clinical recording system of the procedure in place. Nurses commonly amend the procedure and terminology on an ad hoc basis. The results of this survey confirm that the Department of Health should set national standards for the policies and procedures for patient observation and that as an interim step practice guidance should be issued to all nurses (and other mental health workers) involved in this procedure.