This article deals with two related aims and corresponding areas. The first part deals with the historical and socioeconomic conditions behind the development of self-management in Peru and Latin America in the post-war period and its expansion in the 1970s. In this way, the first part contextualizes the second part, which describes a concrete experience with a worker-owned and run enterprise in Lima, Peru, between 1978 and 1979. At Texoro, a textile enterprise whose workers had gained legal control of the machinery and equipment after its previous private owners had declared bankruptcy, an organizational and training strategy was implemented, along participatory lines. The latter included the following three components: (1) large group training into democratic forms of deliberation and decision-making, (2) the formation of small self-help peer groups and (3) the provision of individualized psychological/ counselling services for workers and employees, on a voluntary basis. Given the multi-problem or crisis situation which was diagnosed by the researcher/trainer as afflicting workers at Texoro in 1978, when the pilot project was undertaken, training courses of a specific content were postponed until 1979. The results of the organizational and training strategy explored during one year at Texoro were rather promising and suggestive. By late 1979, the levels of democratic deliberation and decision-making, including social control by the majority of workers of existing patterns of elitism, had been considerably improved at the general assembly level. The experience with the small self-help peer groups had increased the levels of solidarity and group morale. Finally, the counselling/psychological support provided to the workers evidenced two things: firstly, the existence of psychological problems ranging from light to severe, in many of the workers interviewed, which would interfere with the productive and organizational areas of the enterprise. Secondly, it pointed to the lack of mental health care services available to this Econonfic atnd Industrial DemnocracY (SAGE, London, Newbury Park and New Delhi), Vol. 12 (1991), 119-135. 120ELconoioc (t1(d Industridl Detnocract' neglected section of the population. Channelling the services and research of mental health practitioners, such as psychologists. psychiatrists and social workers, to worker-owned and run enterprises. is suggested as one means towards resolving this severe aspect oi working life in Latin America.