The diagnostic categories of mental disorder in DSM-IV and ICD-10 are very powerful in determining how patients are treated, how services are planned, resourced and monitored, and how progress through research is made. It is unfortunate therefore that all of these categories are problematic when applied to elderly patients. Areas of difficulty include: ageist criteria that ignore important changes in social role and functioning with age; co-morbid physical illness and disability (e.g. anxiety, depression); frequent co-morbidity between mental disorders (e.g. anxiety and depression, ‘mixed dementia’, dementia and delirium, dementia and depression); categories vs. dimensions - the issue of clinically significant and treatment-responsive episodes of mental illness that do not meet diagnostic criteria (e.g. mild depression, sub-syndromal delirium); the possible aetiological role of cerebrovascular disease in late-onset disorders (e.g. depression, schizophrenia, dementia); the diagnostic status of ‘new’ conditions (e.g. Lewy body dementia, fronto-temporal dementia, mild cognitive impairment); and the definition of dementia as a progressive and irreversible disorder in the new era of symptomatic treatments. This presentation will review these issues, and will discuss the extent to which the available evidence can support the move to a more aetiologically-based classification of mental disorders in old age.