The world's population is aging, bringing about an ever-greater burden of mental disorders in older adults. Given multimorbidities, the mental health care of these people and their family caregivers is labor-intensive. At the same time, ageism is a big problem for older people, with and without mental disorders. Positive elements of aging, such as resilience, wisdom and prosocial behaviors, need to be highlighted and promoted, both to combat stigma and to help protect and improve mental health in older adults. The positive psychiatry of aging is not an oxymoron, but a scientific construct strongly informed by research evidence. We champion a broader concept of geriatric psychiatry - one that encompasses health as well as illness. In the present paper, we address these issues in the context of four disorders that are the greatest source of years lived with disability: neurocognitive disorders, major depression, schizophrenia, and substance use disorders. We emphasize the need for implementation of multidisciplinary team care, with comprehensive assessment, clinical management, intensive outreach, and coordination of mental, physical and social health services. We also underscore the need for further research into moderators and mediators of treatment response variability. Because optimal care of older adults with mental disorders is both patient-focused and family-centered, we call for further research into enhancing the well-being of family caregivers. To optimize both the safety and efficacy of pharmacotherapy, further attention to metabolic, cardiovascular and neurological tolerability is much needed, together with further development and testing of medications that reduce the risk for suicide. At the same time, we also address positive aging and normal cognitive aging, both as an antidote to ageism and as a catalyst for change in the way we think about aging per se and late-life mental disorders more specifically. It is in this context that we provide directions for future clinical care and research.