Diagnosis of mental health needs in people with mental retardation using the DSM-III-R manual was critically reviewed. Conceptual issues included the interaction of different diagnosis categories; the cognitive and linguistic competencies often required for diagnosis; the potential mismatch between psychopathology in people with mental retardation and the DSM-III-R nosology; and issues relating to multi-axial classification. Strategies identified to explore and resolve these issues include better documentation of the frequency and nature of these problems when using unmodified DSM-III-R criteria, better empirical piloting of modified diagnostic criteria with people with severe and profound mental retardation, and the use of social validity data to identify potential mismatches between psychopathology in people with mental retardation and DSM-III-R diagnoses.