BACKGROUND: Between 1998 and 1999, a burden of disease assessment was carried out in Victoria, Australia applying and improving on the methods of the Global Burden of Disease Study. This paper describes the methods and results of the calculations of the burden due to 22 mental disorders, adding 14 conditions not included in previous burden of disease estimates. METHODS: The National Survey of Mental Health and Wellbeing provided recent data on the occurrence of the major adult mental disorders in Australia. Data from international studies and expert advice further contributed to the construction of disease models, describing each condition in terms of incidence, average duration and level of severity, with adjustments for comorbidity with other mental disorders. Disability weights for the time spent in different states of mental ill health were borrowed mainly from a study in the Netherlands, supplemented by weights derived in a local extrapolation exercise. RESULTS: Mental disorders were the third largest group of conditions contributing to the burden of disease in Victoria, ranking behind cancers and cardiovascular diseases. Depression was the greatest cause of disability in both men and women. Eight other mental disorders in men and seven in women ranked among the top twenty causes of disability. CONCLUSIONS: Insufficient information on the natural history of many of the mental disorders, the limited information on the validity of mental disorder diagnoses in community surveys and considerable differences between ICD-10 and DSM-IV defined diagnoses were the main concerns about the accuracy of the estimates. Similar and often greater concerns have been raised in relation to the estimation of the burden from common non-fatal physical conditions such as asthma, diabetes and osteoarthritis. In comparison, psychiatric epidemiology can boast greater scientific rigour in setting standards for population surveys.