Sexual dysfunction is one of the most common psychiatric disorders, but it is often ignored in assessment. It can be primary or secondary (a result of psychiatric disorder or medication). Success rates in managing sexual dysfunction are relatively high, with good response to psychological and medical interventions. In ICD-10 and DSM-IV-TR, sexual dysfunctions are broadly classified on the basis of the stages of sexual activity, from arousal to orgasm. There are major similarities between ICD and DSM in diagnosis and classification of sexual dysfunction, but both systems raise challenges. These include definitions of what is ‘normal’ and how abnormality is defined. In this article, we describe the role of the two systems and possible amendments that might help researchers and clinicians. We also present key principles for the assessment and treatment of people who experience sexual dysfunction. We consider problems that need to be managed in engaging and in the therapeutic alliance.