At the beginning of 1878, Carl Fredrik Hill's mental health deteriorated. The diagnosis, which today would be termed paranoid schizophrenic psychosis, greatly affected him, and he was admitted to a clinic. Despite this, he continued to draw throughout. In 1882, with help from his family, Hill was moved from France to St. Lars Hospital in Lund. He left the hospital in 1883 and moved back to his childhood home where he was cared for by his mother and his sister Hedda.

From 1883 to 1911, Hill lived in his own world and produced several thousand drawings with various motifs and techniques (ink, India ink, chalk, pastel, and watercolour). He primarily used coloured and black chalk, but when he had access to more materials, he could fill large sheets of paper with compositions in ink, gold, and silver tinctures. His inspiration often came from illustrated books and magazines, as well as from his own early works that surrounded him at home. He also authored a book, called "Versmanuskriptet". On 22 February 1911, Carl Fredrik Hill died from complications after pneumonia.

Today, Malmö Art Museum holds over 2600 drawings by Carl Fredrik Hill. The vast majority were donated by Hedda Hill's estate in 1931. The collection also includes 25 paintings, most of which are oil on canvas.