Digital health-tracking tools are changing mental health care by giving patients the ability to collect passively measured patient-generated health data (PGHD; ie, data collected from connected devices with little to no patient effort). Although there are existing clinical guidelines for how mental health clinicians should use more traditional, active forms of PGHD for clinical decision-making, there is less clarity on how passive PGHD can be used. We conducted a qualitative study to understand mental health clinicians' perceptions and concerns regarding the use of technology-enabled, passively collected PGHD for clinical decision-making. Our interviews sought to understand participants' current experiences with and visions for using passive PGHD. Mental health clinicians providing outpatient services were recruited to participate in semistructured interviews. Interview recordings were deidentified, transcribed, and qualitatively coded to identify overarching themes. Overall, 12 mental health clinicians (n=11, 92% psychiatrists and n=1, 8% clinical psychologist) were interviewed. We identified 4 overarching themes. First, passive PGHD are patient driven-we found that current passive PGHD use was patient driven, not clinician driven; participating clinicians only considered passive PGHD for clinical decision-making when patients brought passive data to clinical encounters. The second theme was active versus passive data as subjective versus objective data-participants viewed the contrast between active and passive PGHD as a contrast between interpretive data on patients' mental health and objective information on behavior. Participants believed that prioritizing passive over self-reported, active PGHD would reduce opportunities for patients to reflect upon their mental health, reducing treatment engagement and raising questions about how passive data can best complement active data for clinical decision-making. Third, passive PGHD must be delivered at appropriate times for action-participants were concerned with the real-time nature of passive PGHD; they believed that it would be infeasible to use passive PGHD for real-time patient monitoring outside clinical encounters and more feasible to use passive PGHD during clinical encounters when clinicians can make treatment decisions. The fourth theme was protecting patient privacy-participating clinicians wanted to protect patient privacy within passive PGHD-sharing programs and discussed opportunities to refine data sharing consent to improve transparency surrounding passive PGHD collection and use. Although passive PGHD has the potential to enable more contextualized measurement, this study highlights the need for building and disseminating an evidence base describing how and when passive measures should be used for clinical decision-making. This evidence base should clarify how to use passive data alongside more traditional forms of active PGHD, when clinicians should view passive PGHD to make treatment decisions, and how to protect patient privacy within passive data-sharing programs. Clear evidence would more effectively support the uptake and effective use of these novel tools for both patients and their clinicians.