Abstract Background Readmission rates of psychiatric inpatients are higher in South Korea than other Organization for Economic Co-operation and Development (OECD) countries. In addition, the solution for readmission control is deficient based on the characteristics of the South Korean National Health Insurance (NHI) system. Therefore, it is necessary to identify ways to reduce psychiatric inpatient readmissions. This study investigated the relationship between inpatient volume per psychiatrist and the readmission rate of psychiatric inpatients in South Korea. Method We used NHI claim data ( N = 37,796) from 53 hospitals to analyze readmission within 30 days for five diagnosis (organic mental disorders, mental and behavioral disorders due to psychoactive substance use, schizophrenia, mood disorders, neurotic disorders, and stress-related and somatoform disorders) between 2010 and 2013. We performed χ 2 and analysis of variance tests to investigate associations between patient and hospital-level variables and readmission within 30 days. Finally, generalized estimating equation (GEE) models were analyzed to examine possible associations with readmission. Results Readmissions within 30 days accounted for 1,598 (4.5 %) claims. Multilevel analysis demonstrated that inpatient volume per psychiatrist were inversely related with readmission within 30 days (low odds ratio [OR]: 0.38, 95 % confidence interval [CI]: 0.28–0.51; mid-low OR: 0.48, 95 % CI: 0.36–0.63; mid-high OR: 0.55, 95 % CI: 0.44–0.69; Q4 = ref). The subgroup analysis by diagnosis revealed that both “schizophrenia, schizotypal, and delusional disorders” and “mood disorders” had inverse relationships with readmission risk for all volume groups. Conclusions We observed an inverse association between inpatient volume per psychiatrist and the 30-day readmission rate of psychiatric inpatients, suggesting that it could be a useful quality indicator in mental health care.